Managing a thriving wholesale business is no easy task. Every part of your supply chain needs to be running smoothly and effectively. From purchasing to inventory management, from production to sales, every function needs to be running efficiently in order to meet your customer needs.
While wholesalers’ most pressing responsibilities vary from industry to industry, certain key business practices are applicable for all industry types. Let us explore 6 wholesale business best practices that can help increase your business’s efficiency.
1.Automate Your Back-Office Processes
Your wholesale business needs to maintain an agile supply chain operation in order to run effectively. One way to do so is to automate your back-office processes. Many back-office functions can be automated. Some examples of such functions are purchasing, inventory management and sales. The key benefits of having back-office automation in your wholesale business include the elimination of repetitive manual data entry, reduced administrative errors and increased supply chain transparency.
Thanks to technological advancements, small and medium business can now afford to implement back-office automation tools. Depending on the rate your business scales and grow in the future, there are different software applications available in the market to cater to different business needs and size.
2. Streamline Your Order And Inventory Management Operations
A business should try to connect, or integrate, the different functions of their business as much as possible to maximize its operational efficiencies. Integrating your purchasing, production, inventory, sales, accounting, etc. within a cloud-based inventory solution creates a win-win situation for both your business and your customers. With a streamlined process, your company will reap the benefits of fewer errors and fewer delays through automating and eliminating time-consuming order and inventory management activities. Your customers will enjoy a better customer experience with a more customer-centric sales experience as well as receiving their orders on time.
For example, Dona Chai, a New-York based chai concentrated company, managed to reduce their time spend on inventory management by 80% after streamlining their order and inventory management operations with the help of Sweet inventory software.
3. Implement Tiered Pricing System To Reward Bigger Purchases
Giving discounts is an effective way to incentivize customers to purchase from you, however, this is not a sustainable method to use in the long run. Instead, your business can consider implementing a tiered pricing strategy to incentivize your customers to make larger purchases from you. The more products a retailer purchases from you, the more revenue you generate and the faster your inventory turnover.
So how does a tiered pricing system work? For example, if your customer purchases less than 300 units from you, the unit price will be $20. If your customer purchase between 301 units to 500 units, the unit price will be reduced to $18. If your customers purchase more than 500 units from you, the unit price will be further reduced to $16
The higher the product quantity your customers order from you, the higher savings per unit they can enjoy. Thus, they will be incentivized to increase the size of their wholesale purchases. When customers increase the size of their wholesale purchases, your company can enjoy higher revenue and lower inventory storage cost.
4. Implement A Lot Tracking System
A lot tracking system allows your business to track and trace each and every single unit of inventory going in and out of your warehouses. This process starts with the purchase of your raw materials from your suppliers until the delivery of the finished goods to your customer’s doorstep.
With a lot tracking system in place, your business can enjoy one hundred percent traceability throughout the entire supply chain. By sorting your inventory into different batches and lots, you can easily monitor your near-expiring inventory to take quick action to implement sales strategies such as giving discounted to reduce losses. Furthermore, in the event that some of your stocks are expired, your business can quickly identify which product batches should not be sold to your customers and removed for sale.
In case of emergencies when your business might need to call for a product recall, a lot tracking system allows you to track down the affected products and customers quickly. The information provided by the system will allow you to contact your customers to inform them what products have been affected so they can stop the sales of the affected product. The faster your affected product can be recalled, the lower the chances that your reputation and your customer’s safety will be damaged.
5. Use A Barcode System for Inventory Management
A barcode system can help your wholesale business manage your inventory better. With barcode scanning, your business can save time and reduce manual errors in your operations. Barcodes can be used for a variety of different purposes such as receipting purchase orders, doing stock counts, and managing sales shipments.
Barcode scanning eliminates the need for manual inputting of the serial number, ensuring that your system always reflects the correct information, resulting in fewer mistakes.
Furthermore, barcode scanning speeds up the rate at which you manage inventory. For example, for order processing, the traditional method of manually checking the serial number and matching it the computer system is time-consuming. Imagine having to constantly match the serial numbers manually for over 1000 units of products; it is a tedious process. With barcodes, all the information can be collected instantly with the scan of a barcode scanner instead of physically logging everything by hand. With a simple scan of a barcode, save time and increase the efficiency of managing your inventory.
6. Sell Online With A B2B eCommerce Sales Channel
With B2B eCommerce growing at a rapid rate ( it is expected to reach USD $6.7 Trillion by 2020), it would be foolish for companies to ignore this sales channel. Many companies already have an existing B2B eCommerce portal or are in the process of building or finding one.
With a B2B eCommerce portal, allow your customers to enjoy a streamlined and easy ordering process. Now, they can order from you, anywhere and anytime they want, letting them do self-service order management at their convenience.
So what are the benefits can your business enjoy with a B2B eCommerce portal? The traditional method of handling customer orders is a time-consuming and order-ridden process. Errors can occur when order details from phone calls are inputted wrongly into spreadsheets or information are passed incorrectly from one spreadsheet to another. With a B2B eCommerce platform in place, all your order information is centralized in one place. Your employees can search for information with ease, enjoying the benefits of faster order processing time and reduced errors.
Other benefits your business can enjoy also include improved customer retention, receive customer’s payments in a shorter time and improved efficiency and accuracy in your inventory’s operation.
If you are looking for a quick way to launch your very own B2B eCommerce portal in a short time, you can look for a dedicated B2B eCommerce Portal provider for a quick set up to allow you to start selling immediately to your customers.
These 6 wholesale best practices will help ensure that your wholesale business remains competitive to stay ahead of your competitors. By constantly evolving to meet the customer needs in a dynamic environment, your business will be in a stronger position to meet any challenges to come your way.
To help your business stay innovative and one step ahead of your competition, your business should think about investing in an order and inventory management software. For a small to medium size business, you can consider using Sweet, a cloud-based inventory software perfect for your wholesale business needs.
To find out if Sweet is the right fit for your business, request a demo with us today to find out more about our inventory and order management software.