5 common errors wholesalers should eliminate to maximise profitability

Posted by Jackie Taylor on Tue, Jun 04, 2019

Win back your profits by resolving common errors with a wholesale IT solution


There’s good news and bad for wholesalers. On the one hand, economic performance has proved more robust than many analysts expected, creating new opportunities for growth. On the other, challenges such as mounting costs — from increases in the minimum wage to higher pension contributions — and the uncertainties of Brexit remain pressing.

In this climate, wholesalers must seize the opportunity to maximise profitability. But businesses stuck with legacy IT systems, manual processes and poor visibility of key business intelligence are struggling to do that. They must now cut out the common errors standing in the way of greater productivity and profitability, including:

1. Poor inventory management leading to bad purchasing decisions

Good inventory management requires a constant balancing act, with painful results when the business loses its balance. Having insufficient stock leads to lost sales and damaged customer relationships, while having too much ties up the business’s cash in excess inventory.

Demand forecasting is crucial in this context, so that wholesalers are able to accurately predict how much stock they’ll need — and when — ahead of time. But without systems in place to deliver these forecasts, the business will flounder.

2. Inefficient warehousing practices causing mistakes and delay

The ability to get the right stock out of the warehouse and into the hands of customers as quickly and efficiently as possible is crucial to wholesaler profitability. But too many wholesalers still depend on outdated picking practices, often based on paper processes.

This can lead to delays and mistakes with customer orders, risking the customer relationship and creating additional administration. Cutting out the picking mistakes and increasing speed will have a direct impact on the bottom line through reduced costs, as well as boosting customer satisfaction levels.

3. Ill-equipped sales teams without access to key market data

Wholesalers’ sales teams operate in a competitive marketplace and increasingly face the threat of disruption from manufacturers cutting out the wholesaler to sell direct to retailers. In this environment, sales teams must be more responsive to customers’ needs than ever before, even when they’re in the field.

Despite this, some wholesalers leave their sales teams isolated by failing to equip them with the tools they need to operate effectively. Sales staff without the ability to work remotely, with access to real-time information through mobile and cloud technologies will not be able to deliver the customer service now required, jeopardising their relationships.

4. Outdated delivery systems unfit for retailers’ increasing expectations

Retailers are under huge pressure to deliver any-time, any-place fulfilment, so wholesalers that are unable to support this capability are at serious risk of losing market share. But wholesalers operating with out-of-date delivery processes and technologies will struggle to meet such expectations. As a result, they will miss tighter deliver deadlines, face penalties for late shipments and, ultimately, lose their customers.

5. Returns processes that are no longer fit for purpose

In a multi-channel retail environment, wholesalers lacking the capabilities to deal with returns from customers efficiently, risk being swamped by unexpected cost and inventory they had not expected to be returned. But many wholesalers’ systems were set up well before the multi-channel age and are now being stretched to the limit.

How can wholesalers cut these errors out?

Above all, wholesalers now need to focus on improving collaboration and communication at every stage of the supply chain. In practice, it will not be possible to achieve this in businesses that still depend on manual processes or disparate IT systems; these obstruct visibility and efficiency, prevent the business from securing a single view of the customer and limit staff productivity.


Wholesalers now need to look at integrated technology solutions that bring together inventory management, delivery tools, customer relationship management, warehousing solutions and a range of back-office operations. These will cut out the need for manual processing within the business, cut out the silos in which information is currently held and drive increased productivity in every area of operations.

This, ultimately, is the key to securing the profitability improvements for which wholesalers are now searching. In a tough market environment, the most efficient wholesalers exploiting new technologies to operate more effectively, will take the lion’s share of emerging growth opportunities.

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Topics: Wholesale Distribution Solutions