4 Challenges for Wholesale Distributors in 2018

Regardless of the products you sell, wholesale distributors face many of the same challenges every day. Finding a formula to maximize profits, minimize costs and find talented staff is an ongoing effort. For small businesses trying to grow and compete against larger organizations with more resources, it can seem like an uphill battle. However, small organizations can use their size to their advantage, as less bureaucracy makes it easier to adapt quickly to industry changes. And the industry changes a lot. Different consumer demands and increasing competition has transformed the way wholesale distributors do business – from omnichannel sales through eCommerce, EDI, tradeshows and more to trying to compete on shipping times, customers service and price – it is important to have an ear to the ground in the industry to succeed. The tools you use for managing inventory, accounting and other business processes also plays a significant role in helping to address challenges and the right system will help your business grow into the future.

Below we look at 4 challenges currently facing wholesale distributors in 2018.

(1) Efficient shipping is a must.  

Thanks to companies such as Amazon, same day and 2-3 day shipping is becoming the expectation for most customers. Efficient shipping starts with an organized warehouse which optimizes the picking, packing and shipping process so that customers receive the right product as quickly as possible. If you sell online, consider keeping separate inventory for wholesale and eCommerce orders through a virtual warehouse to better manage inventory levels. Keep high-volume items closest to packing stations for easy access and implement bin and shelf locations to help employees quickly locate product. Using mobile picking tools, and barcode scanning allows employees to access picking slips electronically via handheld devices and provides employees with an efficient pick route according to bin and shelf location. Mobile barcode scanning also enables employees to scan items during the pick process which helps to identify any picking errors at the source. As your business evolves and you add more product lines and sales channels, it is important to continuously evaluate your warehouse design and inventory management strategies. Generating orders is only half the picture – your business needs to be able to efficiently ship product to keep customers happy and grow the business.

(2) Automation is becoming standard.

Automation is no longer a differentiating factor when comparing inventory and accounting (ERP) software vendors. Instead, the ability to automate processes across all business departments is a must have in order to compete in the ERP space. In fact, the decision to move from introductory software such as QuickBooks is frequently made in order to automate processes that are currently being performed manually. Automation allows a business to share information and perform specific tasks WITHOUT human intervention. Instead, users set up criteria within the software that dictate what happens within the system and when. A common example is automating the flow of data from an eCommerce sale. With proper integration and automation, once an order is placed online, your ERP system will automatically pull the order information into your ERP (including product, customer and shipping details) and then automatically send the order to the warehouse for picking, packing and shipping – without the need for any employee to do anything in the system (assuming the criteria you initially set-up has been met).

All members of the supply chain want faster and more reliable services through automation – whether that be your customers, vendors or partners. To start automating processes within your organization, look for existing opportunities by evaluating processes. For example, instead of manually rekeying eCommerce orders into your ERP, integrate the two platforms and automate the flow of information. Instead of manually looking up and contacting customers who have overdue accounts, automate the process of A/R collections by setting your ERP to automatically email customers on a regular basis whose accounts are overdue by x number of days or dollar amounts.  The opportunities for automation are endless and the right software vendor will be able to work with you and your team to make recommendations on where automation can save you time and money.

(3) Supply chain partners need access to electronic data.

Partners throughout the entire supply chain want access to more information in real-time – whether this is sales reps, customers, vendors, 3PLs, eCommerce partners etc. Without the ability to easily accept, share and interpret data, bottlenecks arise in the supply chain, slowing down the time from order to shipment. The ability to communicate directly with partners through the integration of business management systems, eCommerce, EDI, mobile applications, etc. helps to standardize information between partners – reducing manual processes. This also makes it easier to add more partners to the supply chain around the world. Partners need access to important information such as custom documents, sales orders, reports, inventory and shipment notifications to operate efficiently.

(4) Scalability is key.

The ability to scale processes and corresponding systems is important to grow your business. As you add more product lines, you need to scale inventory and warehouse space, as you expand your customer base you need to scale sales channels, as order volume increases you need to scale the systems you use to manage orders. It should seem obvious, but as your business grows, your software needs to grow too. This means finding a solution that allows you to add more features as needed and does not restrict your business by setting a limit on file size and number of users.