Wholesale Distribution is an established, complex and dynamic business where distributors must balance a number of competitive challenges, including:
- Meeting the ever-fluctuating customer requirements and demand
- Continually adjusting margins to account for higher supplier costs and reduced selling prices.
- Growing and managing diverse and complex product inventories,
- Accounting for fluctuation and variation within the global supply chain.
- Addressing channel disintermediation.
These challenges also represent opportunities to gain market share and increase revenue. Global wholesale distribution competitors are aware of this, and they are responding.
To stay ahead of the competition, it will be critical to implement tools that integrate business systems and provide visibility across the full scope of distribution business. Tools are not the only element, but the right tools can empower collaboration through information-sharing, as well as enabling smart, fast decision-making to gain the edge in this competitive environment.
If a wholesale distribution business has been established for some time, it likely has established processes in place for inventory control, sales order fulfillment and purchasing.
There is always the option to continue with current processes and systems, but true business leaders will know it’s important to question the status quo in order to meet the competitive challenges from other distributors. Are the existing systems the best way to meet these challenges, including offshore distribution models, and disintermediation of the current channel?
Now Is the Time For Leaders in Wholesale Distribution to Make the Investment
An Aberdeen report from February 2015, titled: “What Has Changed in Wholesale Distribution: 2015 & Beyond,” compared industry leaders with the rest of the pack. The results of the study showed that the market leaders invested twice as many resources in technology than the less-successful competitors. The report explored the need for distributors to change their processes and invest in technology in 2015.*
- “Leaders are saying goodbye to manual processes by investing in automation at twice the rate of followers.”
- “In light of today’s customer-connected digital era, top-performing wholesale distributors are investing in technology at twice the rate of their peers. These leaders are using automation to provide integrated workflows and collaboration to all parties in the demand-to-fulfill network, across each inventory and fulfill/deliver stream.”
Is this out of reach for small and medium distributors?
While small, midsize, and large-scale distributers have some different needs according to size, implementing wholesale distribution software is well within reach for all. The cost to implement highly flexible and fully-functional software has been sufficiently reduced over the last decade, especially with Cloud and SaaS service availability.
Business Leaders can choose to purchase or pay a monthly subscription fee for wholesale distribution software modules, and they also have the option to invest in onsite hardware and infrastructure, or choose a SaaS option supported in the cloud.