INVENTORY MANAGEMENT   |   6 minute read

How to simplify Inventory Management to help your wholesale customers

Over the past weeks, we’ve looked at how to take your eCommerce business wholesale. We’ve covered topics ranging from choosing between private and public B2B portals to how to hire, train, and equip a sales team to impress. And now, it’s time to revisit inventory management.

As an eCommerce retailer, you enjoyed brisk sales, but these customers bought only one or two items in every order. Now that you’re branching out into wholesale, you have a new pool of customers who are purchasing hundreds of products in every order. While that’s great for business, you’re now dealing with an even greater amount of inventory.

So how do you scale up inventory management and fulfillment to move all that stock sitting in your warehouse?

Help your retailers out by offering vendor managed inventory

With inventory management software, you’ll be able to offer your buyers the convenience of a vendor managed inventory. Practising vendor managed inventory means vendors take care of their individual products within a retailer’s inventory. So every time a product hits the reorder point, it’s the vendor’s responsibility to deliver a new shipment. In fact, it’s like selling on consignment.


So how does this help your customers? For starters, your customers won’t have to worry about going out of stock. You’ll know how quickly your products are selling and can adjust your delivery schedule to match the demand.In addition, your customers will get to enjoy lower carrying costs, since they won’t have to worry about purchasing sub-optimal quantities to meet the minimum order quantity any longer.

How does it help your business? Once your customers agree to vendor managed inventory with you, you’ll be party to the intimate details of their business operations.

You’ll benefit from insights into the demand for your product. Unlike your retailers, you won’t be able to see inventory movement across the board, which leaves you in the dark when it comes to demand fluctuations. By offering your retailers the option of vendor managed inventory, you’ll know the popularity of your products and can adjust your output accordingly. With this knowledge, you can decrease the amount of safety stock kept on hand and reduce your carrying costs.

Offering a vendor managed inventory option gives you the chance to bind your retailers to your brand, since moving to a competitor would be troublesome for them. They would have to start managing their own inventory again, dealing with added work and costs. Moreover, you will already have insights into their business, which will make leaving you even harder.

If you are using inventory management software, you’ll be able to set up a consignment location to track and manage your stock across different retailers. You can transfer stock to your retailers’ locations, writing up sales orders to allow you to keep track of inventory movement in your retailers’ stores.

On top of offering your retailers a vendor managed inventory, you can also provide them access to your B2B eCommerce store. In the event your products are flying off the shelves, your retailers may want to order extra products to match consumer demand. Instead of calling you to order more stock, your retailers can access your B2B eCommerce store and purchase new products directly with a few simple clicks.

Offer drop shipping to reach a wider market

When it comes to wholesaling, there are plenty of ways to get your brand out there. You could join a public B2B marketplace or take part in a trade show with the aim of getting retailers to place a wholesale order with you and carry your products in their stores.

For those of you who are currently selling on eCommerce platforms like Shopify or Amazon, you may want to look at offering drop shipping as a means to garner increased exposure for your brand. In this scenario, your retailer would not keep any of your products in stock. When orders come in, your retailer will push these to you, and you will ship these goods directly to the consumer.


While it’s true that offering drop shipping will increase your costs as you’ll be selling more products for less, your profit margins won’t take that big a hit because you won’t have to wholesale at 50% off your retail price. After all, you’re still doing most of the work!

As the supplier, you won’t have to spend extra time investing in marketing to new markets. Instead, your retailers will take care of your marketing efforts for you, helping you to bring your brand to a bigger audience.

That’s great news, but this increase in exposure can result in a surge in orders, and you want to be ready for it. Inventory management software can help you to keep track of the orders coming in, and adding a shipping integration can streamline your shipping and fulfillment processes. With dedicated shipping and fulfillment software, your retailers and their customers will be able to enjoy real time status updates on their order.

Once your products gain traction, your retailers might decide to move away from the drop shipping model, preferring instead to to purchase from you at wholesale prices. When they ask about wholesale, you can direct them to your B2B eCommerce portal with a unique link to a customized store just for them!

Wholesale logistics can be a handful, but by automating certain key processes, you’ll be able to turn these into a business advantage. Next week, we’ll be looking at some of the challenges faced by wholesale businesses, and how to tackle them.


See also:

Wholesaling to the right retailer - It’s a match!

Beginners guide to B2B eCommerce: An eBook

7 ways to save on inventory holding costs