If you’re in the retail business, or wholesale business for that matter, it could be easy to forget that wholesalers and retailers have a lot in common. For instance, both must carry product in order to sell it. Both must manage vendor relationships and customer relationships. Operational efficiency is important if wholesalers and retailers are to profit. However, there are some clear differences.
Retailers typically use an open-to-buy process whereas wholesalers often use the open-to-sell process. There may also be differences in how wholesalers and retailers display their products. Warehousing can also come with very stark differences. Nevertheless, the similarities bear to be mentioned.
When it comes to wholesaling, the following operational efficiencies are just as necessary as they are for retailers:
- Price management – Both retailers and wholesalers need to manage their prices, but price management in wholesale has its own challenges. You might offer steep discounts based on bulk orders. The fact that you provide bulk order opportunities as a part of your business model sets you apart from the average retailer, however, being able to manage prices based on volume, frequency of ordering, and other factors is an absolute must for your wholesale business.
- Real-time process monitoring – Operational efficiency depends a great deal on analytics and real-time information. Everything you track should be available to you in real time.
- Inventory status reporting – With retail, knowing where each individual product is is very important. For wholesalers, you need to know where each product order is. You’ll have customers who order a single product by the hundreds. You need to know if the entire order is arriving in one shipment or multiple shipments, and you need to know where each shipment is at all times.
- Catalog management – Chances are, at least one vendor allows you to order out of a catalog. Being able to manage every vendor’s catalog is very important for your wholesale operation.
- Automatic invoices – Both retailers and wholesalers can benefit from automated processes. For wholesalers, automating your invoices will help you manage orders, vendors, and products more efficiently.
Wholesalers have a lot in common with retailers, but there are differences in the business model. You’ll be more efficient if you have the right tools in place.
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