The challenges of promoting a wholesale business

The challenges of promoting a wholesale business

A wholesale business is faced with numerous challenges, and is under constant pressure to reform. The first and foremost challenge faced by a wholesale business is changing customer requirements which exert pressure on the current order processes and market forecasting. Customer requirements usually reflect economic changes. An uncertain global market causes the customers to alter their purchasing behavior so that they can preserve their business needs. Dwindling customer base forces the wholesalers to increase their marketing spend. The greater competition between wholesalers forces them to reduce the prices. As a result, the wholesalers have to look for cheaper imports from outsourced locations. Moreover, the decreasing sales make it difficult to justify the distribution costs. Hence the wholesalers have to reduce the number of locations they distribute to. This further reduces the sales, and the cycle goes on and on.

Yet another challenge faced by a wholesale business is the one posed by manual systems. The wholesalers often rely on the error-prone paper-based systems for different tasks, which often require duplication of effort. A number of software systems are available to help the wholesalers, but it is not easy to choose the suitable one. If a right system is selected, it can be greatly beneficial. It can help the management make correct business decisions. However if a wrong choice is made, it can do serious harm to the business and can result in grave financial consequences.

Competition from other companies poses a great challenge to a wholesale business. Technologically advanced companies make use of radio frequency identification and stock trading applications. These technologies give them significant competitive advantage over those companies which are not yet technologically advanced. Companies that are less advanced technologically are often tempted to implement isolated solutions designed to automate certain parts of the business. However before taking any such decision, the flexibility of these solutions and their long term impact on business should be carefully considered. Otherwise implementation of such solutions can lead to major disruptions in business.

In order to respond to these challenges, a wholesaler must possess adequate knowledge of each of his customers, their buying patterns, businesses and requirements. In order to stay abreast of such challenges, a wholesaler must possess knowledge about debtors and creditors, profit and loss etc. They need to possess accurate knowledge of stock and suppliers. All this knowledge can be gained by implementing a suitable IT system that is flexible, simple, small and easy.

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