Tool Box
Issue No. 32 - December/January
Tips to improve your wholesale business
by David Brebner
Small and mid-sized wholesalers and distributors contribute a significant percentage of the state’s turnover and employment. They are flexible and quick to adapt to market forces, but business practice constraints continue to reduce their potential profitability.
Information technology can help, but only if the systems present a holistic view of the business and are maintained and extended by skilled people.
Poor or inadequate business systems, lack of expertise to manage them and resistance to change combine to form a leading growth inhibitor for small and mid-sized business.
Wholesale distributors face three main challenges:
1Increasing revenue: How and when should wholesalers optimise pricing according to customer value and willingness to pay? How should wholesalers leverage and extend supplier partnerships to provide new and innovative products?
2Improving margins: How do wholesalers recognise and reduce the effects of returns and outstanding rebates? How do they reduce the sales-to-cash cycle with better billing procedures, without compromising customer satisfaction?
3Improving efficiencies: How should wholesalers deepen supplier and customer relationships - is focusing on value and profitability the right approach? Reducing cost variation is key to long-term success, but what should be done and how can it be measured?
The most successful wholesale distributors share notable characteristics, such as close budget control and integrated IT solutions that address the three challenges.
A recent survey conducted by The Economist Intelligence Unit found that 78% of Australian mid-sized senior business managers believe effective IT is critical to their growth potential.
But installing software does not automatically provide answers. Getting a timely, cost-effective result requires a business-specific analysis of fundamental issues, backed up by integrated, tailored IT solutions.
Senior managers mus...
