Every wholesaler wants to make the most of their limited company resources, serve customers in the best possible way, and succeed in business. But navigating the overwhelming amount of online business advice can be confusing. In this article, we boil things down to three essential tips for wholesalers.
Let’s get started with an evergreen piece of business wisdom:
Know Your Customer
It’s a fundamental principle of business that you must understand what your customer wants in order to sell to them. For wholesale businesses, the customer is a retailer, but just that information isn’t enough to go on. How does this retailer choose what products to stock? Who is the ultimate customer the retailer is selling to? What core desire does your product fulfill? This information can collectively be referred to as a buyer persona.
The more information you have about your customer, the more effectively you can market to them. It's critical to understand your customer's demographics and media habits so that you can design your marketing to send the right message through the right channel. If your audience is middle-aged, high-income, and listens to business podcasts, you should strongly consider sponsoring relevant podcasts. Or, if you’re dealing with Gen Z entrepreneurs who like to learn about finance on TikTok, spend your advertising budget working with influencers who reach this audience naturally. A deep understanding of your audience allows you to spend your marketing budget where it has the most impact.
Beyond the marketing advantages of knowing your customer, there are the merchandising benefits to consider. By knowing your customers' buying habits and preferences, you can select the optimal inventory to stock, allowing you to define your niche. Try to answer the following questions about your customers:
What channels do they buy through — web, mobile, or in-store?Are they repeat buyers? At what frequency will they buy the product?What’s their primary motivation to buy?Are they buying for themselves or others?2. Organize Your Inventory
The path to a well-organized inventory begins with selecting the right inventory management system. Broadly speaking, wholesale business owners choose between two approaches to inventory: periodic or perpetual.
Periodic inventory management is based on conducting physical inventory countson a regular schedule, be it weekly, monthly, or quarterly. Based on the inventory count, you can determine the number of items sold and the cost of goods sold.
Perpetual inventory management uses modern software and item tracking technology to maintain complete transparency as to where goods are in your system, from the moment they arrive in receiving to the point where they are sold and shipped.Periodic inventory management is the more traditional approach and requires less investment in technology. But it also offers managers less actionable information. You won’t know your inventory counts or your profit margin until you complete each count cycle, which might be at an interval of a month or even longer.
In contrast, perpetual inventory management requires a large up-front investment in software and tracking technology but pays dividends by offering real-time information to managers. You’ll always know when to restock, what your profit margin is, and more.
Don’t underestimate the training requirements for setting up perpetual inventory management. All your employees — from receiving to sales to shipping — need to know how to operate your item tracking system and input the correct information at the right time. Their input could be as simple as scanning a barcode or as complicated as manual data entry into the inventory management system.
Our advice? Wholesale suppliers for small businesses should invest in modern inventory management methods. Costs will be rapidly recouped by the superior management techniques that perpetual inventory data enables.
3. Automate What You Can
These days, business automation is widespread and affordable. Every wholesale business should be using a customer management system (CMS) to track its sales process and trigger automated touchpoints like follow-up emails. Automated customer engagement tools like website chatbots can handle basic customer service inquiries and route people to the right human agents for their needs.
In your warehouse, consider investing in RFID item tracking technology. It can automatically track what comes in and out the door and transmit that data to your inventory management system so that you're always up to date. RFID tech can also speed up the picking process by indicating where items are inside your warehouse.
Consider where limited resources currently bottleneck your wholesale business. Can you use automation to augment your capacity? Something as simple as a Zapier integration between an Airtable spreadsheet and your customer email platform might unburden an employee and allow for automated customer updates as an order moves through your sales fulfillment and shipping process. Explore the options for online tool integrations, and don’t be afraid to experiment. Not every automation you try will be worthwhile, but the ones that succeed can be transformative!
Take Carefully Considered Risks
We hope this has inspired you to make bold changes to your wholesale business processes and operational investments. Those who dedicate time to improving their business will reap the rewards on offer from intelligent automation, inventory management, and customer-centric marketing.
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