Conquer Top 5 Challenges in Wholesale Business

‘Wholesale’ has different meanings from the perspectives of both retailers and manufacturers. Wholesalers usually follow the B2B business policy.

A retailer buys products in bulk or in large amounts at lower prices, stocks those products and resells them to individual consumers. On the other hand, a manufacturer sells wholesale offering products in bulk to the middleman or the retailer directly.

Wholesale refers to buying or selling products in bulk at a comparatively cheaper rate. If you are a wholesaler and your sales growth needs consistency, you must consider some challenges in the wholesale business. The rise of global trade has led to an expansion of e-commerce platforms, increasing competition from both local and international markets. In order to stand out from the crowd consider the below 5 major challenges in wholesale business and how to overcome them effectively.

Manage Your Inventory Efficiently
Adopt the New Technology
Overcome Supply Chain Challenges
Accelerate Your Business Growth
Ensure protection against product damage

#1. Manage Your Inventory Efficiently

For wholesalers, one of the major challenges is to control inventory efficiently. It involves a continuous chain of acquiring products, storing them, and selling them to retailers. Business often ends with any of the two situations – insufficient stock or an excess of inventory. When the stock level is lower, businesses can not meet customers’ demands. Conversely, in case of excess inventory, the storage cost and other maintenance costs increase.

Now, to ensure none of the above-mentioned situations arise, you can take the following steps-

Categorize your products into fast-moving, slow-moving, and outdated products. Thus identify high demand products and clear out the slow or outdated products to reduce inventory cost.
Coordinate with your suppliers so that you acquire your products only when you need them for sale. This will reduce storage costs and save you from holding excess inventory.
Use the Minimum Order Quantity(MOQ) policy to move your products faster.
Integrate your online store with an inventory management tool to manage your inventory effectively.

#2. Adopt New Technology

The wholesale industry is experiencing new changes due to various market factors. Wholesale businesses are successfully overcoming these challenges by leveraging the new technology. Although implementing new innovations might require some initial investment, it will help boost your profit margin and stay ahead of the competition.

If you are already running your business on Shopify or Wix or Squarespace or any other platforms, you can use tools from their app store based on your business requirements. These tools can give your customers a better shopping experience which will help improve your customer retention rate. Now, before you choose any new technology for better business operation, consider the following factors –

You can use any of the eCommerce solutions like Shopify, Squarespace or Wix. Set up your online store using any of these platforms and reach a broader audience.
Integrate your online store with the technology that can facilitate efficient bulk order processing, ensure easy order entry and streamline your wholesale operations.
Use tools that can track your inventory stock level, help manage replenishments preventing stockouts or overstocks.
Optimize your supply chain with advanced supply chain management solutions.
Ensure an easy order processing for your customers and save your customers valuable time.
Incorporate any essential tool that can help visualize your costs and ROI (Return Of Investment) more perfectly. In a word, see whether the tool can enhance your wholesale operational efficiency and ultimately drive your business growth.

#3. Overcome Supply Chain Challenges

Supply chain involves the activities related to manufacturing and distributing the wholesale products. Both Companies and Suppliers play a vital role in ensuring the success of Wholesale Operations.

In wholesale business, as customers will buy in bulk, you have to deal with a large number of products. Without a proper visibility of the supply chain, it’s difficult to meet your customers’ expectations. This could lead to inventory overstocking causing more storage costs. Also take the unexpected disruptions to your supply chain into consideration. These disruptions might occur due to different global events. Here are a few tips about how to improve your supply chain –

Analyze your previous data to forecast the future demand from your customer.
Ensure a better communication with your supplier to avoid some unwanted situations might occur due to any possible delays in delivery.
Automate different processes of your supply chain to minimize the errors.
Distribute your inventory to different locations to avoid sudden disruptions and create a more resilient supply chain.

#4. Accelerate Your Business Growth

Every business strives for rapid growth. But limited business relationships and growth opportunities are reasons behind the slow expansion of any wholesale business.

So, how can you enhance the growth of your wholesale business? Here are some effective strategies to consider:

Develop your customer base and expand your business internationally. Increase business relationships both locally and globally.
Build an effective email list and promote your products.
Participate in industry trade shows to meet new contacts, learn new trends and expand.

#5. Ensure Protection against Product Damage

Fire, Earthquakes, Pandemic or any natural calamities can damage your product. Ensure any contingency plan or insurance in case of emergency. Additionally you can do the following –

Ensure proper packaging of your products. Use sturdy boxes to minimize the risk of damage.
For sensitive products ensure proper temperature control during storage.
Ensure a clear returns management process to handle damaged products efficiently
Conduct quality control inspections from time to time to Identify potential issues in your products.

To succeed in wholesale business, it requires a strategic approach to overcome the common challenges. Managing inventory effectively, adapting with the market changes and leveraging with the new technology, all these are part of a strategic approach. Consider these approaches to be a competitive edge in the market.