Smart Strategies for Distribution: Collaboration and Diversification

Wholesale distributors face many challenges in a business environment with shrinking margins, rising costs, increased competition, and demanding customers.  Two key strategies, enabled with the latest solutions, can improve sales, improve margins and streamline processing: collaboration and diversification.

Let's take a look at collaboration first. Collaboration was a key buzzword in the late '90s as ERP software vendors focused on messaging to get distributors to collaborate with vendors for demand planning.  Back then collaboration focused around supply chain planning - in this article we're referring to collaboration as a way to accelerate sales with wholesale customers.  

How do your customers sell your product today?  Consider the many channels your customer's sell through - brick and mortar stores, online stores , and even marketplaces such as eBay and Amazon.  Have you ever thought about how your wholesale customers get the data they need to effectively sell your products?  For example, if your customer will be selling your products online, they are going to need item descriptions that entice online shoppers to buy.  They will also need good images - perhaps different images that give multiple views of the item.  

Have you looked at how your wholesale customers are merchandising your products online?  You may be surprised to find less than stellar descriptions and pixelated images that don't do much to excite buyers.  

You can maintain better brand control and provide more value to these customers by providing them with the data they need to sell more effectively - and faster.  What if you could send them your electronic item catalog - complete with professional images, accurate sizes or attributes, and excellent descriptions?  You'd be able to better control your brand and your customer could easily import this data into their eCommerce, POS or even marketplace sales channels.  Getting your products out in front of customers faster can mean faster sales - and more orders for you.

What data can you give to your wholesale suppliers? Most companies don't provide any - leaving few options for customers but the DIY approach. Many distributors provide a PDF catalog or tell wholesale customers to take the information from their web site - which is a hefty manual effort for customers.  This effort causes delays in getting your product to market.  Additionally if you aren't providing images or descriptive information, your customer is left to create their own - which may or may not be the way you'd like to see your products merchandised to the public.

Many companies don't provide this information to wholesale customers because it's too expensive, difficult and/or time consuming.  It can also be scary to have your catalog data floating around and potentially in the hands of your competitors.  But what if you had a platform that could do this securely and could craft this data for your customers directly from data in your ERP or business system?  Think about how quickly your customers could merchandise your products and get them out there for sale, which is what you want, right?  It's possible - it's not as hard as you think and it provides more value to your customers.  It's value that will keep them coming back because you make it so easy for them to sell your products.

And while we're on the subject - have you considered offering drop ship services?  Many of your customers want to sell so much more of your product line but they don't have the capital to do it.  If they didn't have to hold inventory they could simply merchandise your items online and orders could flow directly to you for fulfillment.  With the right platform in place, this could be done easily - and provide the integration, and inventory visibility required to do drop shipping the right way.  You benefit by having more eyeballs on your products with very little investment.  

As long as you deploy consistency within your drop ship model that you follow with each and every drop ship customer, you may find that the cost to do so is minimal when compared to the increase in sales.  Choosing the right multi-channel platform can help you achieve these results.

Diversification can help improve sales too. For example, are you able to sell strategically in both wholesale and retail settings across multiple channels?

In an ideal scenario, wholesale customers can purchase from your website and be presented with wholesale pricing while the public could purchase by viewing retail pricing.  Orders can be captured in the fulfillment system of your choice, and sales transactions can roll up under the appropriate customer details - or under a generic customer for consumer purchases.  Offering other channels for your customers to purchase from you can coincide with the processes you've set up today - and be streamlined so you can sell more without having to add staff for support.

Many of you still look at Amazon or eBay as "garage sale" sites for consumers to get rid of used stuff, but the landscape has changed.  More companies are taking advantage of the reach that eBay and Amazon have in getting their products into the hands of searching buyers.  In Australia, eBay is the first place companies start in building their online presence.  They do this because they can achieve sales in a matter of minutes or days versus weeks or months with their own corporate site.  

eBay and Amazon offer excellent reach for companies to get rid of excess, damaged or returned inventory too. The trick is to find an integration platform that easily use the data you already have in your inventory system to syndicate these items to marketplaces and bring in orders so you can fulfill them without having to access eBay and Amazon (or any other channel system) individually.  A system that keeps inventory synchronized between the channels will free you from being chained to each system to update inventory levels too.

The point is that diversifying the channels in which you sell to customers can drastically improve sales - as long as you deploy a foundation that keeps item, inventory, customer and sales transactions synchronized between systems electronically. Trying to manually update and access the data in these systems may increase sales, but you won't be able to keep up with the data entry demands. If you're going to diversify this year, you need to have a rock solid foundation that will handle electronic data transactions so that you fill orders accurately, ship the products that are accurately described, and ultimately allow you to maintain excellent service.  A few bad reviews on Amazon and eBay can take you off the market faster than you got there!

Distributors who evolve through collaboration with their customers, provide a more robust, cost efficient, user friendly way of increasing sales without having to bring on resources to support growth.  They can keep tighter control of their brand and help ensure brand consistency while at the same time build loyal, ongoing sales relationships with customers that inch out competition. Distributors that constantly look to diversify their offerings often discover new ways of doing business before their competitors.  Become a leader in your industry -  maintain an edge over the competition, get closer to your customers, and make the most of your strategic technology investments.

About Steve Weber

Steve Weber is the CEO of nChannel.com. nChannel is a complete web-based, multi-channel management platform. nChannel can connect many of the systems you use to manage sales environments and easily manage the operations associated with multi-channel selling - using the systems you already own. Steve is a 13 year veteran and former Vice-President of eMarketplace Outsourcing Services for Sterling Commerce, a division of IBM. More recently Steve was named Microsoft Partner of the Year for Dynamics Retail and awarded Microsoft Retail Independent Software Vendor (ISV) of the year for his company's data sync solutions.

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