Everything in your wholesale distribution business humming along nicely: your customers are satisfied, and your supply chain is consistently meeting their demands. Now, you want to expand, but you’re wondering exactly how you are going to make that happen.
As a business owner, you already appreciate that additional products, brand variety, and increased turnover are going to be at least three of your major considerations. However, each one of these is going to have an impact on both your funding options and, more importantly, your cash flow.
We have identified five key areas where a wholesale distribution business can focus its attention on ensuring a smooth transition from a small-scale operation to high volume wholesale distribution.
Your current customers are the best indicators of what sells well, what doesn’t and the types of products you should start selling more of. Therefore, it makes a great deal of sense to consider the buying patterns of your current customers before choosing additional brands or products. As a bonus, it is also widely acknowledged that only a fraction of the effort expended in attracting a new client is needed to keep an existing one happy.
By keeping your current customers in mind, you ensure they’ll be coming along with you for the transition. Those customers will be a great base on the route to expansion, and matching new products that complement those they purchase already is crucial to making that work.
If you’ve been selling wholesale for a while, you will already know that both your projected and current turnover are governing factors when it comes to setting prices. This is when having an established trading history and a software accounting package that provides your clients’ purchasing habits is worth its weight in gold. Knowledge is king when you are planning to expand, while guesswork is the route to ruin.
When you are able to make a reliable estimation of projected sales, setting minimum order quantities and pricing your items will be much easier and more accurate. Also, you will be much more confident about negotiating bulk price deals with your own suppliers with such information at your fingertips.
Even if we ourselves have never uttered the phrase, we must surely have heard “I only have one pair of hands” on more than a few occasions when under pressure to deliver the goods. This principle can be applied to every aspect of a business from inbound supply and manufacturing to distribution and delivery. The good news, however, is that your business can probably wring some more out of what you already have with some innovative streamlining and highly affordable automation.
By streamlining your processes, you can save time and use that time to expand and grow your distribution business. By identifying areas where efficiency can be improved and using cloud-based software to link processes like accounting and inventory, your wholesale expansion is more likely to be a success.
You have done the due diligence, checked the figures, and put the systems in place, but unless you have also done the marketing, you are going to end up with a warehouse full of stock. Your existing marketing team has been doing a sterling job, keeping up with the needs of your existing customers and generating new business, but things have changed.
Now you have a lot more stock to move and you need to push into new markets with new clients, maybe you will be coming up against a new group of competitors too. Cloud inventory management software will link with your sales operation, providing them (and you) with historical sales data, and it will highlight the most profitable areas where your marketing team can focus its efforts.
It won’t matter that you have the best products at the lowest prices if your clients are experiencing problems getting their hands on them. In this age of instant ordering and purchasing, the customer doesn’t have the time to deal with a slow or complicated ordering process.
If your wholesale distribution business is going to flourish, an easy to navigate online sales area and bullet-proof e-commerce system is a number one priority. By linking to your accounting, invoicing, and supply chain management programs, your front-end purchasing and ordering system will ensure that everything from ordering to shipment runs without a hitch.
Through the implementation of diligent planning and a logically phased roll-out program, an existing supplier can make a smooth and successful transition to becoming a wholesale distributor. With the selective addition of brands and products that match both their existing and potential client base, the opportunities for expansion into high turnover wholesale are ripe for the picking.
For businesses that are seeking to expand, wholesale can be a lucrative channel that improves on profit without a huge effort or drain on your existing businesses resources. Expand your distribution offerings, and if you do it thoughtfully, considering the above tips, you should be able to watch your business expand as well.