With everything that has been going on in the past year, companies working in the wholesale distribution industry are facing serious pressures. In fact, Deloitte claims that the wholesale distribution industry is navigating an “inflection point.“
In many ways, this disruption in the industry is understandable. As a wholesale distributor, you are feeling the stress from all sides. Wholesalers and distributors are a central link between the economy and the supply chain, working behind the scenes to supply and deliver goods to customers around the world.
Wholesale distributors are working within the supply chains of manufacturers with automated systems, as well as alongside large retailers like Amazon and Wal-Mart with their sophisticated logistical systems. Anyone can see how being in the middle of that can be stressful!
However, wholesale distributors need not worry. There are tools and tactics you can use to stay innovative and keep up with the pack.
In fact, many experts are identifying some key innovative practices that are keeping the wholesale distribution industry healthy and competitive.
Today we will talk about how the wholesale distribution sector works, and look at the trends and innovations that are currently changing the industry.
Let’s start off by discussing each component of the wholesale distribution industry.
Wholesaling industry 101
Simply put, a wholesaler fulfills orders from retailers by reselling goods in large quantities for manufacturers.
A wholesaler sells their products in bulk to retailers, which allows the retailer to purchase at a lower price than if they were to buy single items or smaller quantities.
Wholesalers buy goods from either the manufacturer or a reseller, and in return get a large discount for the items. Wholesalers are rarely involved with the manufacturing process. Instead, they focus on the distribution.
What is the distribution industry?
A distributor works closely with a manufacturer to sell more goods. The distributor is the middleman between the producer of the product and the retailer. Distributors can buy from manufacturers and sell to retailers, or, less commonly, they can sell directly to the consumer or business.
Distributors provide many benefits to manufacturers, like decreasing inventory and service costs. They provide inventory management and process optimization strategies to create a total solution for their customers.
Distributors often represent multiple products or companies, and can therefore bundle them together. This results in a streamlined buying process and a decrease in costs for retailers who need products from multiple companies.
