Challenges facing wholesale distributors: How tech can help

Wholesale distributors occupy a difficult position in the modern market. The industry has been a huge and integral part of the economy and the overall movement of goods for over a century, but recent changes have posed new challenges that threaten to disrupt that.

Luckily, they’re not issues that can’t be solved. In fact, for the most part the answers are already out there, and they almost all lie with embracing new technology. Distributors that can evolve and adapt to the changing market could even find themselves in a better position than the one in which they started. Here are some of the bigger challenges wholesale distributors face, and how tech can help with them.

Disintermediation

Wholesale distributors typically occupy a “middle man” position in the market between manufacturers and retailers. For decades this has been advantageous, however it is a position that is becoming threatened by the rise of technology. Retailers can now use wholesale marketplaces online to get in touch directly with manufacturers, cutting you out entirely.

While technology has caused this problem, it is also the solution. You can use it to provide a service that retailers can’t get from a wholesale marketplace, such as vendor-managed inventory. This uses inventory management software to automate certain elements of distribution, saving retailers valuable time.

The retailer sets reorder points that automatically let you know when a certain item needs restocking, and you deliver it to them. This provides the retailer with a lot of benefits, such as never running out of stock, and gives you an advantage over the system of wholesale markets.

Inventory issues

Keeping track of what’s in warehouses is probably one of the biggest issues for wholesale distributors, especially when stock is constantly on the move. Some companies have invested in RFID tags, but these can be extremely expensive.

Instead, inventory management software like Sage X3 can provide a much more efficient and cost-effective solution. It allows you to track goods in real-time, on multiple devices, as it is based in the cloud. This means that changes will be updated on an online database, so they are accessible by anyone in your business, no matter where they are.

Centralising your inventory in a system such as this also avoids any confusion or miscommunication stemming from having multiple databases. You should find inventory management software allows you to forecast as well, giving you the ability to predict demand and avoid stocking too much or too little of your products.

By using software rather than tags, you will end up saving yourself money while also making distribution a lot easier. If your company is having inventory issues, a program like Sage X3 could well be the answer you’ve been looking for.

Keeping up with growth

In the US, 89.9 per cent of distribution businesses expect sales to grow in 2017, with almost one in five (19.3 per cent) of companies expecting growth of more than ten per cent. These figures are impressive and exciting, but they can also pose a problem. Is your business ready for this level of expansion?

Again, technology is the answer. Solutions like inventory management software makes running a distribution company so much easier that you will be much more able to focus on growth. The visibility it provides also enables you to see where any choke-points are in your supply chain, allowing you to make your business more efficient in order to meet the demands of growth.

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