Changing ways of interaction between retailers and suppliers

Changing ways of interaction between retailers and suppliers

Since the beginning of wholesale business, retailers and suppliers conduct business in an interactive way. Wholesalers send their samples of products through suppliers to the retailers who intend to sell them ahead. Well, as the time shifted ahead the interaction between suppliers and retailers has moved well beyond samples delivery to include several more business provisions. In today's business world, a supplier serves more than one retailer and it has become quite difficult to remain in personal touch with any wholesaler or retailer. Technology has made it easier and different ways to develop and manage interaction between suppliers and retailers are discovered.

All retailers do not work at the same level, such as they all do not order thousands of items at one time. Small retailers need items in less quantity and large retailers' needs are different. At the same time, they both need different tools and equipments to keep interaction with their suppliers. Small retailers usually order items and complete transactions through telephone calls and FAX. It is simple yet costlier method for suppliers to receive smaller, independent and manual orders. They can not memorize it in brain. Thus they have to transfer the orders in Microsoft excel sheet and it is quite hectic to transfer the manual orders to computer and then fulfill the demands of several small retailers.

At the same time, when a small retailer places his order through a fax, the order can not be taken and kept in file. This paper-based system increases the cost of handling the independent retail orders placed from different locations. For example, if a supplier receives 100 orders per day which is placed manually from retailers how difficult it is to shift the orders to computer and then fulfill the demands of each retail order. It is usual for wholesale suppliers to receive several thousand retail orders like this and their cost increases due to manual and paper-based order systems.

Suppliers prefer to conduct commercial transactions with large retailers through electronic transaction process like Electronic Data Exchange (EDI). The EDI software allows both sides (retailers and suppliers) to develop and maintain software in computer systems and automatically conduct the steps of EDI transactions with each other. The internal databases of computer and EDI software are quite large and complex to maintain. The advantage of this software is that whenever a new entry is added to it, it reports these entry steps to internal databases and system.

These are different interaction ways of retailers and suppliers that are quite popular and effective regarding business transactions.

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