Impact of financial shortfall on wholesale business

Impact of financial shortfall on wholesale business

The global financial crisis has proved to be a bad news for every business throughout the world. In order to survive during this time of recession, most of the companies have tried to review their headcount. Also some companies have entered into the tendency of freezing the budget. Most of the wholesale businesses have also adopted a number of cost reducing measures in order to survive during the financial shortfall. The growth of businesses might suffer if the wholesalers overreact to the situation. The global financial shortfall has caused many of the wholesale businesses to reorganise their operations.

The global financial crisis has seriously affected the manufacturers and suppliers, which has in turn affected the wholesalers. Moreover the wholesalers have been forced by the recession to adopt multiple measures like reducing the number of employees in order to reduce the overall costs. Things have come to such a pass that many wholesalers have sought financial assistance from the government in order to survive. Some wholesalers have also faced the threat of bankruptcy. The buying power of the consumers has reduced to a great extent, which has had a great negative impact on wholesale businesses. Big wholesale businesses have suffered more than the medium and small ones, the reason being that the buyers are turning towards medium and small scale businesses which offer similar wholesale products and services at lower prices. This does not imply that the medium and small scale businesses have not been affected negatively by recession, but they have certainly suffered lesser damage as compared to large scale businesses. The reason for lesser degree of damage is that the medium and small scale businesses have small sized operations that can maintain operation even at low costs.

Generally the wholesalers are trying to weather difficult financial conditions by managing costs and cash flow and increasing business volume. Many businesses are trying to reduce costs by performing a number of tasks electronically, for example electronic billing and online banking. Businesses are also switching to low energy lighting and hence reducing the amount of energy consumption, eliminating printed material and renegotiating bank service charges. Wholesale businesses are also trying to focus on debt collection and efficient recovery in order to manage cash flow.

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