Being an SME (small to medium enterprise) wholesale producer or distributor is tough. The typical modus operandi of selling through a variety of channels: distributors, mass retail, independents, even end-consumers, presents an intricate web of challenges.
These companies have the potential for big gains because the wholesale market is massive. One portion of it, the wholesale distribution industry, generated $5.6 trillion in sales volume in 2016 for the US economy alone. This is according to research done by the National Association of Wholesaler-Distributors. However, gaining a toe-hold in this market is not easy. Companies need to ensure they have sound fundamentals in their business economics, can operate efficiently, and acquire customers at scale. The challenges in growing a wholesale business are numerous. One thing going for these companies: there is no shortage of technology to help with these challenges. There are many cloud-based SaaS (software as a service) providers helping large, and small businesses. SaaS solutions exist for every function of a business, from automating your back-office to visualizing your data.
Here, we will share some of the common challenges that wholesale companies face, and identify how cloud technology can help you overcome these challenges.
A. Manual data errors due to manual processes
Manual data entry is a tedious process and creates opportunities for errors. Research by IBM found that bad data cost the US economy an estimated $3.1 trillion a year. In addition, the average benchmark for data entry error is 1%. These errors, can add up quickly for an SME company with thin margins. Errors come about for many reasons. Most commonly, misinterpretation of data, loss of focus or just plain human error. Even worse, it's incredibly time-consuming when everything goes to plan. That's time which could be spent finding new customers or improving your product.
B. Overstock and stock-outs
Wholesale companies often face difficulty getting up-to-date inventory information. This is because many still rely on outdated and manual practices to manage their inventory. Without up-to-date information, companies are not able to plan and forecast in advance with accuracy. This results in either overstock or stock-outs. Companies are affected by getting a financial hit or experiencing a lost account. A study by IHL Group highlighted that businesses lost $1.1 trillion globally in revenue due to overstocks and stock-outs.
C. Disconnected systems
Ideally, a business wants to function efficiently. This means working as a unified team with each individual equipped with the same knowledge of where things stand. However, in reality, this is impossible. Teams are fragmented. Tasks get delayed or remain incomplete. Information is kept in different places. By the time one person learns about a work update, it might be outdated. Business opportunities can be lost and key projects can be impacted by this lack of unified data and understanding.
Even more critical, your customer's experiences with you may suffer. When customers are made to wait for a long time or do not receive the right order, they may start to look for other suppliers.
Cloud Solutions to Wholesale challenges
A. Solving manual data errors
Using a cloud solution to manage your business workflow is critical to solving the problem of manual data entry. It allows data to be entered in once and the required data is then broadcasted to different systems throughout the organization. Different departments would not need to key in the same information again in a different system. This results in a lower chance of duplicate entries and creates an extremely efficient workflow. This allows employees to focus on more productive tasks, rather than the repeated keying in of the same data.
For SME producers and distributors, a B2B e-commerce portal can help reduce manual order errors as well. In addition, many customers these days want to enter their orders directly, just as they do on consumer e-commerce sites. By ordering online, orders can be passed instantly to the respective individuals working to fulfill orders. This leaves little room for manual errors and saves you hours each week of entering orders and tracking down mistakes.
B. Reducing overstock and stock-outs
The root cause of overstocking and stock-outs is the lack of real-time information. Having a cloud system solves this problem by providing your team transparency to orders, inventory, and supplies anytime and anywhere they are. Team members get accurate inventory counts in real-time, resulting in better planning and forecasting. Reducing unnecessary inventory and stock-outs is difficult, but crucial to maximizing your profit potential.
C. Connecting your disparate sources of data
With a cloud system, you can streamline your business's operation. Many of these apps allow you to integrate with other cloud applications in your workflow, making your data more accessible and, as a result, more valuable. You can also choose to use a single application to manage your company's workflow. Consequently, your business is now better equipped to fix any problems straightaway, with a "single source of truth" unifying data from different applications. In the long run, your business will operate more effectively and efficiently.
It's clear that using a cloud solution can bring about tremendous benefits SME businesses. If you manage a wholesale business and face some of the challenges described above, Sweet can help you. Our feature set includes tailor-made functionality for wholesalers, such as a B2B e-Commerce portal and integrations to accounting, e-commerce, and shipping apps and websites. Contact us now for a free demo.