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5 challenges for the modern wholesale business

5 challenges for the modern wholesale business
13.11.2019 Administrator

Manufacturers and retailers are increasingly investing in their own distribution networks, effectively eliminating intermediaries and delivering their products directly to consumers. As a result, wholesalers are constantly struggling to maintain their market position and maintain the necessary profitability.
In fact, many distributors today find themselves in an unenviable position - on the one hand, there are manufacturers who increase prices to cover their rising operating costs, and on the other hand, there are retailers who demand a lower price with a larger volume of orders. to meet consumer needs. This, among many other challenges, is slowly changing the face of the industry as we know it today.

Challenge №1: Effective inventory management

Problems with inventory management in wholesale trade have been around for a long time. Liabilities for goods are not limited to controlling their physical stocks, done manually by physically counting each item, or by using RFID tags, which are quite expensive. Nowadays, the control over the detailed tracking of the movement of goods from their entry into the warehouse to shipment and delivery occupies a priority position. This is most often done by software solutions that provide visibility over the entire process. There are integrated business systems such as SAP B1that effectively meet the challenge of inventory management, and more. SAP B1 improves the management of stocks and the supply chain by real-time synchronization of ordered, received and delivered goods, as well as stocks. This contributes to a higher level of operational efficiency.

Challenge №2: The era of e-commerce

The trend of widespread use of e-commerce in the B2C industry has finally spread to the B2B sector, in particular wholesalers. Today, distributors around the world are vying to create a better online presence. Every day we see new, fully optimized websites appearing, with the focus shifting from "simply" having a website to effectively using e-commerce to attract and retain new customers. As a result, customer expectations are beginning to change. They expect the same high level of service from wholesalers as they receive from retailers. Here again, business management systems play an important role. SAP Business One, for example, provides tools for integration with online stores, which helps effectively manage the entire process related to sales and customer life cycle - from initial contact to final sale, after-sales services and support.

Challenge № 3: Increasingly demanding customers

Perhaps the biggest challenge for wholesale distributors is that with each passing year, consumers are becoming more demanding. The main reason for this is that the so-called Millennial generation, which practically grew up in the digital age, has reached the stage where it begins to occupy leading positions in business. As Millennials have grown with online commerce and mobile Internet browsing, they have become accustomed to a certain standard of service that B2C companies have been providing for years. In contrast, the B2B industry, and especially wholesale distributors, have been slower to adopt (and some in Bulgaria still adopt) this standard. The industry is changing slowly and companies will certainly adapt to this new trend if they want to survive. The question is who will be the first to succeed in this ever-changing business environment.

Challenge №4: Elimination of intermediaries

As mentioned earlier, manufacturers and retailers are increasingly eliminating distributors from the process and using their own networks to deliver products to customers. The benefit for both parties is financial, as the manufacturer can afford to sell his products at a higher price, and the retailer still receives them cheaper than he could get them from the wholesaler.
Is it possible to stop this trend? Probably not. But what can be done is for wholesalers to change their role and importance throughout the process. Again, thanks to existing technologies, distributors can provide greater added value to their customers than manufacturers. Using business surveys, analyzes and reports of SAP B1, wholesalers could anticipate the needs of their customers in real time and act as an expert advisor who takes care of them and knows exactly when the next order is. In this way, they save the retailer time and trouble and he would recognize them as a necessary link in the chain, which facilitates his work.

Challenge №5: Improving productivity

Most wholesale companies strive to improve their productivity by using available commercial resources. Some of them work on the model with sales representatives on site and respectively have a finite number of customers who can visit during the day and a finite number of transactions that they can conclude. But what if these companies used technology to increase the productivity of their sales representatives?
The integrated functionalities of SAP Business One provide a holistic view of potential and actual customers so that sales representatives can better understand and respond adequately to customer needs. Also, with the help of the SAP Business One Sales mobile application, sales representatives can manage sales information on the go, wherever they are.
Many wholesalers continue to follow the well-known well-trodden business paths, but technology cannot be stopped. Only those who realize and adopt a good digital strategy in time will move forward and have a clear competitive advantage over everyone else.

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