Wholesale Management - The 10 steps for business success

Wholesale Management: The 10 Steps for Business Success

Every wholesaler starts a business to succeed. However, most don't have the right strategies to propel them to this success. And if they do, they are not always effective. So, when you experience difficulties managing your business, know it's time to change your tactics.

The success of your wholesale business boils down to one thing; management. What you may not know is managing your wholesale business is not all about hard work, dedication, and commitment. It's also about the strategies you use to make it flourish. 

What is Wholesale Management?

Wholesale management entails operating a business that sells goods in bulk and at a lower price than retail. Wholesalers sell goods to companies in the retail industry who later resell them to the consumers.

Wholesale businesses fall under any of these two models:

• The wholesaler manufactures their products and sells them directly to the retailers. The retailers then resell these products to the consumers.

• The wholesalers buy goods in large quantities from the producers and resell them to the retailers.

Here are the steps to managing your wholesale business successfully.

Have a Business Plan

A business plan
is a document that outlines your wholesale business's objectives and how you plan to achieve them. It lays down the roadmap to the success of your business, from financial and marketing to operational standpoints. 

Importance of having a business plan

• It helps your businesses attract investors

• It's also a smart tool for developing effective growth strategies

• It enables your business to determine its future financial needs

An ideal business plan should include your business's objectives, executive summary, market analysis, mission statement, analysis of your industry, unique selling point, and products and services you'll provide.

Create a Pricing Strategy

Typical wholesale pricing is based on the principle of selling larger volumes at a lower markup. Your goal as a wholesaler is to maintain a profit margin by offering your retail customers a 50% discount on their regular retail price. The result is you provide competitive prices to your customers and still make a profit.

When creating a pricing strategy, ensure to balance sales volume and profitability. The goal is to earn profit and remain competitive. Therefore, your pricing strategy should factor in your operational cost, the wholesale price, and recommended retail.

Another thing, your business's price should create a sense of value for your retail customers.

Market the Brand

To a business, branding is everything. Your brand's reputation can build or destroy your business, so guard it. The best way to build your business's reputation and be recognized by potential customers is to have a brand awareness strategy
.

A brand awareness strategy aims to grow your retail customer base and establish brand recognition in the wholesaling market. This recognition goes a long way in making your business stand out. Besides, you'll get more orders from your existing customers, increase your order size and attract new customers.

Some of the best ways to promote your brand as a wholesaler include:

• Automating your business operations. Automating your ordering and shipping streamlines your process, making them simple and easy. This efficiency in placing and receiving orders encourages your customers to order more. 

•  Attend trade shows. Trade shows are industry-specific, and the people you'll meet there are those interested in or involved in your line of business. So let them know what you are offering.

Create Long-term Relationships with Stakeholders

Developing long-lasting relationships with individuals with a vested interest in your wholesale business is the key to succeeding. These stakeholders can affect or be affected by your business's operations and performance.

A wholesaler's stakeholders include customers, clients, staff, board members, government, etc. Another group interested in your business success but isn't directly associated with its internal operations is the suppliers.

So, ensure that your business creates and maintains mutually beneficial long-term relationships with all stakeholders. One way to enhance these relationships is by maintaining constant communication.

Hire the Right Staff

Your business's employees work directly with your customers, making them important to the customer experience. Since they have a direct impact on your bottom line, it’s important that you hire right
. When recruiting, identify and select candidates based on their expertise, experience, and your long-term business objectives and goals.

Also, examine your staff's current situations to check for gaps in performance and skills. Doing so lets you know if you need to train more, pay better, or get better employees. 

Diversify Sales Channels

Wholesalers who depend on a single platform to generate leads limit their business's growth. A good marketing strategy should have different sales channels to create stability, resilience, and consistency in reaching your target audience.

Diversifying sales channels gives your consumers more touch points to interact with your commodities. The multiple channels translate to more buying opportunities for the consumer. For instance, if you have a sales team that takes sales calls from customers, you can also create an online shop on your website and a store on your Instagram account. 

Maintain a Healthy Cash Flow

A positive cash flow
is essential for any business that wants to run its operations smoothly. If your business has more cash flowing in than out, it's maintaining a healthy cash flow. Your business can therefore settle its debts, pay bills, reinvest into the business, pay employees, meet customer demands, and run its operations smoothly.

In contrast, a negative cash flow forces you to take additional loans to continue operating your business. You also risk losing your business. So, learn to balance your checks and balances. 

Some ways to maintain your cash flow include:

• Have enough cash in your reserves for expenses like employee salaries

• Plan for the customer's demands effectively to avoid holding a high level of inventory 

• Ensure you process your invoice on time and accurately

• You must also know how to predict your expenditure and sales volume for the financial year

• Your businesses should be able to convert the invoices into cash through invoice factoring

 
Be Adaptable

The shift towards digital has caused changes in the B2B customer buying behavior. Retail customers now prefer the efficiency and cost-effectiveness that comes with e-commerce. The only way to survive the competition as a wholesaler is to embrace the use of online and offline platforms for your business.

Also, be flexible enough to automate your operations to streamline your processes and increase your delivery efficiency.

Set up B2B E-commerce

There's explosive growth in eCommerce, and wholesalers are now dealing with a fresh wave of demands to move to eCommerce. Retail customers are shifting to online shopping because most of your stock products are found online. Besides, most of them love the convenience that comes with shopping online

Setting up a B2B e-commerce platform makes it easy for old and new customers to access your products and make payment. The innovation increases your speed, accuracy and efficiency in order fulfillment too. This efficiency will draw customers to your business and keep you ahead of the competition.

Use Inventory Management Software

Manual inventory management can be challenging because the process requires constant monitoring to ensure accurate transactions. 

Smart wholesaling involves using technologies to enhance your operations speed and efficiency by integrating inventory management software. 

The Erply POS system’s inventory management
lets you know what you have and where. When you transfer stock to another location in the warehouse, the system updates automatically.

Additionally, Erply will assist with stock taking, saving you time and money.

Sign up for the free trial
today.

Conclusion 

Wholesale distribution businesses are unique, and managing a wholesale business until it flourishes takes time, patience, and strategies.

That’s why businesses must adapt by creating a business plan, developing a pricing strategy, creating a B2B e-commerce platform, having multiple sales channels, and more. Once you implement these strategies, the sky is the limit.