Maximising Opportunities through Trade & Wholesale Cost Optimization
The COVID-19 pandemic has hit the Trade & Wholesale sector in unexpected and unprecedented ways. The impact has caused serious disruptions in global supply chains, influencing product availability and increased delivery times.
However, the pandemic has also created opportunities for the sector. Whilst in the short term we have seen business reduce stocks to lower inventory investment, supply chain disruptions have highlighted vulnerabilities. To remain responsive supply management is changing, creating opportunities for service providers widening supply options and increasing inventory to buffer demand.
Traditionally, the Trade & Wholesale sector bridges supply chain gaps between producers and market supply chains, regulating volumes and timing with distribution needs and providing financial and knowledge support. But the internet is also threatening that position as information becomes more transparent with direct access between end user and producers. Will Amazon and Ali Baba, following their success in consumer markets, disrupt the business to business market as well?
To what extent will that change the competitive arena? How should companies in Trade & Wholesale position themselves in the supply chain, with traditional roles changing? What role should technology and digitalisation play? How should Trade & Wholesale meet the challenge to offer the same service, speed and reliability being experienced in today’s consumer markets?
"A modern wholesale model demands businesses continue to invest more sophistication into their complex supply chain. What are you prioritising on right now to remain competitive for the future?"
The traditional role of wholesale is changing in today’s world
Volume production, general market distribution, with large, stocked inventories was historically the key aspect of a wholesaler’s operations. Over time these features have been replaced by just-in-time deliveries, build-to-order, and customisation.
In a rapidly changing world, businesses must be proactive in leveraging new tools and technologies to keep up with changing consumer expectations.
Industry Disruption
Retailers are struggling to compete with Amazon, but until recently, wholesale has been relatively unscathed. But could the advent of Amazon Business change that?
Digitalization as Opportunity
While large parts of the wholesale sector are still struggling to identify suitable digitalization strategies and business models, two industries have already seen the opportunities and understood how to use them. The book trade and IT industry were among the first to face the challenges presented by online commerce.
New Providers in Payment Management
The wholesale industry has been providing credit assistance to retailers for many years through generous payment terms on the goods supplied for resale to consumers. As a result, many wholesale companies have developed highly professional and efficient systems for managing payments and receivables.
Areas of Opportunity for Improved Sustainability & Cost Reduction
This list is not exhaustive, but hopefully it helps you to visualize just how much potential opportunity there is in your business to save money, improve cash flow and increase financial flexibility.
"Customer and technology changes are transforming traditional trade and wholesale. It is imperative businesses embrace digital convergences within their operations to sustain growth and remain competitive."