It’s no secret that the distribution industry is changing rapidly, and as a result, wholesalers are facing a breadth of challenges that are threatening their place in the supply chain. Between keeping up with high customer expectations while managing reliance on the growing number of suppliers and maintaining the value of a larger, complex stock, the headaches for wholesalers continue to increase. According to a 2015 study commissioned by Exact, the top two challenges specific to the wholesale industry include pressure on prices due to online competition and the competition from suppliers through direct sales. However, for small wholesalers, challenges with customer satisfaction, cost reduction and profit margins are creating even more headaches.
While alleviating these pains may seem like a daunting task, a complete overhaul of your operations is not needed. Instead, make a plan to take just three simple steps to increase customer satisfaction and build better margins, all while securing your position in the supply chain:
Choose the right IT tools for your business
There are an increasing number of IT service providers and automation tools that wholesalers can take advantage of, but being able to identify which one will best add value and move your business forward is crucial. With so many facets of a business to manage — ERP, accounting, CRM, supply chain management (SCM), warehouse, inventory and sales orders — being able to stay up to date on real-time company information can be difficult. While implementing the most cutting-edge technology might seem like the best step, for a small wholesaler, this could be a huge cost-driver and only complicate your business processes. Take the time to truly evaluate which of these aspects requires an advanced IT solution, and which can be managed all in one platform. If you’re a small wholesaler, consider investing in your ERP, CRM and SCM systems, all of which contribute the most value. Not only will you experience ease in integration and better manage your costs, but you’ll also become more informed on how your business operates.
Take the warehouse with you
Having readily available information on item prices, stock positions, delivery dates and other warehouse updates no matter where you are can make all the difference between winning and losing a new account. On-hand access to logistical information or financial data alone is no longer enough; customers and stakeholders expect you to connect the dots between all your business decisions. Consider applications that give you mobile access to these insights so you can answer any question during a face-to-face encounter, referencing the most up-to-date data. With customer expectations increasing and stock inventory becoming more complex, having the ability to check on perishable items, sales per customer or current deliveries into and out of the warehouse will give you the end-to-end insight you need to manage an efficient operation.
Collaborate and communicate online
Use online business software and applications to gain and share insight into agreements, stock levels, prices and delivery items with your customers, suppliers and partners. Doing so will keep your stakeholders informed when you’re unable to meet face-to-face. Becoming more transparent, flexible and responsive will help you to cut costs and provide accurate information around stock availability. This will also allow you to offer a wide range of products in a kind of virtual warehouse, avoiding the need to physically keep them all in stock and freeing up capital you can put to work in other areas. By being completely open with all of your supply chain partners, you’ll be able to address their individual needs more efficiently and effectively, thereby differentiating your services from competitors and strengthening your position in the supply chain.
With pressures on margins being applied from all directions — such as competition within the supply chain and customers’ increasing demands for more value — wholesalers need to protect their position and optimize operations. Though the market place challenges are only expected to increase, following these steps will give you a leg up on the competition and the insight, control and flexibility within your business that is critical for success.
Logan Paquin is Director of Product Management for Exact