7 Keys to Becoming a Successful Wholesale Distributor
As an intermediary between manufacturers and retailers, wholesale distributors are required to be able to fulfill orders in a timely manner. While many retailers are now choosing to place direct orders with manufacturers, your role as a wholesale distributor is still significant. It’s just that you need special tricks to keep your position as a middleman. Here are seven tips on how to succeed in a wholesale distribution business that I summarize from various wholesale business articles.
1. Limit Manual Processes
As customer demand increases and retailers require faster shipping from you, the easiest way to do is to speed up your entire distribution process. You may not be able to completely eliminate manual work in your wholesale business, but you can limit it.
Various complex jobs such as managing inventory, purchase orders, sales orders and finances should no longer be done manually. The time and effort you spend doing these jobs should be spent on improving other aspects of your business. Today, many wholesalers have used automated solutions to improve their business efficiency. If you haven’t, now is the right time to implement it.
2. Monitor Cash Flow Regularly
Your wholesale business wouldn’t be able to run smoothly without a good cash flow management. You need to know every cent you make and that of you spend. Make sure you always pay your bills in a timely manner so you don’t have any piling up debt. Equally important, you also need to be careful in handling your receivables by ensuring that you get paid on time.
Know the financial circumstances of your business all the time so you can easily decide when to invest and when to re-order stuff. To help you know your company’s financial condition well, start creating comprehensive cash flow statements on a regular basis. Find out more about cash flow management here.
3. Get Your Inventory Straight
As a wholesale distributor, it is your job to sell goods in bulk. However, holding too much inventory on hand isn’t good for your business finances. You don’t need to keep the amount of stock beyond your need. You have to pay attention to lead times, reorder levels, and security of your stock to ensure that you don’t keep any stock in vain.
Therefore, it is very important for you to have a good inventory management. Inventory management systems that are built for wholesalers and retailers can help you in this regard. The systems enable you to check inventory levels, re-order to suppliers and help you control your stock purchases.
4. Apply Credit Policy
You should be wiser in giving credit policy to your buyers. One of most common mistakes made by wholesale distributors is overextend credit to their buyers. This mistake could affect your cash flow and damage your organization. You can avoid this by providing firm payment terms and credit limits to your buyers upfront. The credit limits can then be increased based on their payment history.
5. Make the Transition to E-commerce
Now more and more retailers are buying stocks online. E-commerce provides a lot of conveniences for them, from making payments and communicating with sellers to tracking shipments. Wholesale distributors should have merged offline and online marketing to help them reach more prospective buyers. If you don’t have an Ecommerce site yet, create one now to facilitate your buyers as well as to boost your sales.
6. Speed Up Order Fulfillment
Retailers want faster shipping to help them meet customers’ needs faster. If you’re unable to provide a faster shipping to retailers, then your position as a middleman may no longer be useful to them and they might start buying directly from manufacturers. To avoid this situation, start to automate your order fulfillment process.
By automating your order fulfillment, you’ll no longer need to process every order manually. Your warehouse personnel can instantly receive orders and process them in no time, even if your warehouses are spread across multiple locations. Through technology, you can also monitor your couriers and make sure that your buyers receive their orders on time.
7. Optimize Your Customer Service
Even for wholesalers, customer service remains an important factor in the success of their businesses. Another major mistake made by wholesalers is not following up with their customers after the initial communication, even though they know that getting new customers is much more expensive than maintaining their existing ones.
Consider providing an online customer service to stay connected with your customers. Send personalized messages to them to make them feel special. Find out how to retain your existing customers here.