These are the 4 Biggest Challenges that Wholesale Distributors Face
The ever-evolving economic scenario brings with it several challenges for wholesale distributors. Although certain wholesale distributors may have varying modes of operations, the challenges they face are fairly similar. Here are some of them:
1. Increased Demands from Manufacturers
Manufacturers seem to be increasing their demands with each passing day. But then the reason for this is quite obvious. Highly agile supply chains and logistic operations allow manufacturers to sell more to the customers in shorter time periods. This increases their bottom line. The wholesale distributors must therefore keep pace with increasingly higher manufacturing output which is being made possible by rapid advancements in technology.
There is also increasing consolidation, mergers, joint ventures and similar strategic collaboration between market leaders. This means that wholesale distributors are now facing ever-increasing orders.
2. Increased Demands from Retailers
Big-box retail chains are making increased demands as the competition heats up. Many retailers are now increasing their product offerings to keep up with growing consumer demand. Since higher volumes must be delivered at short notice, retailers are imposing tighter deadlines and giving bigger orders to wholesale distributors. Late shipments, inaccuracies and ordering mistakes now incur fines and other austere penalties. Not only must wholesale distributors deliver larger volumes at shorter notice, they must also give due regard to accuracy. The demands being placed upon wholesale distributors seem to be ever-increasing.
3. Fuel Price Volatility
Political instability and oil politics takes its toll on the economy in the form of higher fuel prices. Modern times are now becoming increasingly uncertain with the high variability in energy prices.
The transport sector obviously has to bear the brunt of the impact since fuel is the main operational expense. Consequently, logistics chains and wholesale distributors have to impose higher charges for their services. This raises the cost of the goods being delivered. Higher costs are passed down to the end consumer in the form of cost driven inflation.
Distributors are forced to raise the cost of their service to shore up the low profit margins. But they also face a dilemma because raising charges means higher frustration for their clients. Due to higher costs, retailers may try to seek alternate arrangements. For instance, they may try to get their goods delivered direct from manufacturers.
4. Employee Safety
It takes just one accident to undo decades of hard work and tarnish the brand image instantly. Drivers are forced to work long shifts. Sleep deprivation and sedentary nature of their job leads to drowsiness which is the main cause of road accidents. Warehouse workers also face threats of falling and the danger of getting crushed by heavy loads.
Very high costs are incurred due to insurance payments for accidents. Litigation takes its toll on the firm’s reputation.
These problems are being compounded by increasing workload and demand.
In order to remain competitive, wholesale distributors must upgrade their technology to cutting-edge solutions. This will lead to higher workflow efficiency, increased collaboration across the board and streamlining of operations.
This is possible with the Indigo Olive Software. Get in touch with us today.
Indigo Olive Software
1001 – Indian Creek Road,
Wynnewood, PA 19096
Phone: +1 (888) 788-4634 / 888-898-INDI