Challenges Facing Wholesale Businesses
Running a business in today’s landscape is no easy task, and the wholesale industry is no different. Today we’re taking a look at the challenges facing wholesalers and what can be done to alleviate some of the pressures. Let’s dive in!
Shortages and Surpluses
Sitting on either side of the challenge spectrum are issues of supply shortages and supply surpluses. There’s equal issue in not having enough product and having so much that you can’t move it. You either can’t meet your customer needs (thus losing your customers and money) or you can’t get rid of what you have (thus paying for storage facilities and items that won’t sell). To avoid this predicament, brush up on inventory management. Three inventory management techniques from Fishbowl include:
- Just In Time; Only securing goods when completely necessary
- Stock Review – Regular review of estimated inventory requirements
- ABC Analysis – Separating stock into three groups
Check out their piece on Inventory Management to learn more!
Is it Profitable?
You’ve got a lot going on running a business, so it’s not unheard of that you’d lack a bit of visibility into how profitable your products are. Consider things like storage fees and hidden inventory costs. Hidden inventory costs can include utilities, labor, discounts, and shipping. If all of this is worth the profits your products bring in, great. If not, it might be time to consider sunsetting some of your goods.
Business-to-Business (B2B) wholesalers are now up against the world wide web, which has been dominated by Business-to-Consumer (B2C) ecommerce up until recently. The ease and convenience of your standard B2C retailer’s online platform is making it even more necessary to have a top-notch sales site. Wholesalers have to provide great imagery, informative descriptions, clear pricing, and a simple path to purchase. What’s more, there is a higher demand for customer service with B2B digital sales—the stakes are higher here, and common questions need to be answered as soon as possible in order to land a sale. Take a look at your website and evaluate whether it’s performing to its highest potential. Going digital is not the place to skimp, either—if the need is there, don’t shy away from investing in a marketing professional and website development team to do a makeover. Short on cash? Consider applying for a business line of credit to foot the bill.
Speed, Speed, Speed
We just ran through the desire for B2B consumers to be treated like B2C customers, which extends to shipping rates as well. Customers today are so accustomed to the 2-day shipping options they can get from the major online retailers, and it’s difficult for wholesalers to accommodate that. It’s important to have great relationships with manufactures that can partner with you on direct shipping. You may also need to open another warehouse location to but back on how far your goods have to travel.
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