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Competitive market leaves AU distributors with no room for error

If you’re a distributor in Australia, you could be feeling the pressure from an increasingly competitive market. On top of competition from peers, a domestic sales survey conducted last year pointed out that more wineries are recording an increase in direct to consumer sales, possibly at the cost of diminishing sales to retailers (and distributors).

We’ve been tracking the changes in the wine industry (you’ll soon find out why!) and in our bid to dive deeper into the day to day problems faced by distributors, we sent a member from our TradeGecko team to Melbourne. While travelling, he chatted in-depth with wineries, retailers, and distributors. Upon his return, he confirmed a major issue we believed was common in the industry:

Retailers may receive the wrong invoices from distributors because distributors are hurriedly entering orders into the system to make cut-off times and meet delivery terms.

And while retailers are waiting to get their invoices sorted out by their distributors, out-of-stock situations can force retailers to sell the consumer their second choice. Distributors will acknowledge their error and work on getting the right invoices to their retailers, but the damage is already done. After all, a retailer would rather do business with a distributor who gets the right order to them in good time.


So how can distributors ensure customer happiness by fulfilling the right orders faster?

  1. Standardize order communication

    A distributor’s sales representatives receive orders from retailers in a dizzying array of forms -- in person, phone calls, email, SMS, a picture of a handwritten sticky note order... heck we've even heard some distributors still receive a fax order from time to time! Once the sales rep makes sense of the order, he or she has to relay the information to the administrative staff in charge of entering the order into the system, who then forwards the order to the warehouse.

    In the above process, there are so many opportunities for errors to occur, especially when the staff is hurrying to meet the deadline.

    To reduce the chance of human error, a distributor may consider standardizing the order procedure.

    Instead of leaving their sales representatives to forward their orders to the administrative staff at their convenience, distributors can set specific communication procedures. For example, instructing sales representatives to collate all orders according to “Customer / Product / Quantity”, before sending these off to the administrative staff an hour before the cut-off time.

    Alternatively, distributors could enable their sales representatives to enter orders directly into the system as they come in, freeing up the administrative staff to handle other tasks.

    This way, distributors will be able to ensure that they’ll be able to get the right orders to their warehouses promptly to make next day or two day delivery windows.

  2. Warehouse optimization

    Picking the wrong product happens -- even with scan guns. The warehouse is a fast-paced environment with plenty of room for error, especially when time is not on your side.

    To minimize the chances of picking errors occurring, one important step is to make sure that picking lists show the product, location and sequence of the items to be picked.

    Distributors can also work on optimizing the layout of their warehouses to improve order picking productivity by having clearly labeled shelves and bins for every SKU. On top of this, distributors can make sure they have the right items in the right places, like placing your top-sellers within easy reach so warehouse pickers can fill these orders quickly.

    For an optimized warehouse layout, distributors need to make sure that they also have a dedicated packing and shipping area. This gives the staff the room they need to do their job, and by making their jobs more straightforward, they’ll be able to improve their efficiency and complete their tasks faster.
  3. Set goals

    In light of the concerns outlined above, distributors can set goals to measure their successes.

    For example, you could set goals around:
    1. Increasing efficiency: With increased efficiency, you’ll be able to fulfill the right orders faster. You could make sure all orders are in ½ an hour before the official cut off time to give your administrative staff adequate time to key in the right orders before sending these off to the warehouse for fulfillment. You could also measure the time it takes for your warehouse staff to pick, pack, and ship an order, and to work on reducing the time needed.
    2. Decreasing errors: This should be your first priority, as by decreasing the amount of wrong invoices going out, you’ll be able to win your customers’ trust back. You can start by looking at how many wrong invoices you have to re-enter every month, and start setting goals around cutting that amount by 10% or more.

In this piece, we’ve given you tips you can act on and implement immediately. However, if you’ve already accomplished all the above and want to take your business to the next level, it could be time for you to automate error-prone processes with an inventory application.

Instead of relying on manual entering of important data like sales orders, you could equip your sales representatives with a mobile app that lets them take orders from their customers and invoicing them immediately. If you want to free up your sales representatives from visiting regular customers just to take their order, you can also send them a direct link to your wholesale store, where they’ll be able to place their orders directly with the system.

By reducing the likelihood of errors occurring, you’ll be able to improve your efficiency, increase sales, and customer relationships.


See Also:

Selling on the go with the TradeGecko for Sales mobile app

Are complicated taxes hurting the Australian alcohol SMB market?

A quick guide to wine distribution in Singapore