Distributors and wholesalers: Add services to attract new business

by | Apr 4, 2018

Due to shifts in the retail and retail supply chain industry, distributors and wholesalers have had a lot to think about to make sure they’re able to maintain and expand their business.

One of the approaches that distributors and wholesalers are taking is to offer their products directly to end-consumers via their own e-commerce sites, or through sales channels like Amazon Marketplace or Walmart Marketplace. Though this approach allows them to charge at-or-just-below retail prices, shipping costs may put a damper on the profits and selling directly to consumers isn’t going to move the needle much all by itself in this landscape.

According to RSR Research and SPS Commerce analysis, a better way to add to distributors’ bottom line is to offer more services to their trading partners. Here are some ideas for the types of services that distributors could offer to their buyers and grow sales.

Transparent inventory visibility: More and more often, retailers and other buyers are asking for visibility on their trading partners’ inventory. This is in part to ensure a consistent flow of inventory for their needs, but also supports direct-to-consumer drop shipments. Whether or not a wholesaler or distributor has current inventory information could impact whether or not a buyer offers a product in their catalog or displays it on their website – they may temporarily remove it so consumers can’t order what could potentially be an out-of-stock item. By offering inventory transparency, distributors can share inventory counts with their trading partners, allow them to use that information in a variety of strategic ways and by doing so add value to the relationship.

Offer carrier/shipment visibility: When a buyer wants to know about the status of an order — say, when a pallet load is in transit or a single order is making its way to the end user — it’s helpful to them to know the delivery status of that order. Whether working with a 3PL, FTL carrier, LTL carrier, parcel carrier or another transportation service, they want to be able to tell at a glance whether the delivery is going to their own distribution center or traveling directly to the retailer’s customer. Be sure you’re able to enable shipment visibility to your buyer customers and their potentially consumer-facing staff – provide the advanced ship notice (ASN) that includes the tracking number so it can be shared in all the right places.

Drop shipping capabilities: Drop shipping is growing in popularity among smaller retailers who want to offer the same level of service as Amazon and Walmart, even if they can’t hope to compete on price and volume. Distributors can help retailers expand their omnichannel presence and grow their Endless Aisle by drop shipping orders on their behalf.

Use buyers’ branded packaging and forms: The final part of a completed e-commerce experience is for consumers to receive their order at their home and believe it came directly from the retailer themselves. Drop shipping could make this difficult unless you’re able to ship with their branded shipping materials, their packing slip and return information. The retailer or buyer can provide the materials, you just have to make sure you use them when an order comes in from their website.

Offer to accommodate returns: One question buyers often ask too late is “what do we do if a customer wants to return a drop shipped item?” Do they take it at the store? Return it to the buyer’s distribution center? Or return it to the original distributor? There are any number of variables to make one of these ideas better than another, but it depends on the buyer, the distributor and a host of other mitigating factors. Still, it won’t hurt for distributors to offer and provide that service to your retail partners. Try to come up with a returns and reverse logistics solution that is more convenient and efficient and less costly for both of you. If you can provide this, it makes you more valuable to your retail partners and they’ll more likely to entrust you with more of their shelf and website space.

Consumers are asking more and more of their retailers, and as a result, retailers are asking more of every link in the supply chain. By adding the services, distributors can retain and expand current retail partnerships as well as make themselves more attractive to new retailers and other trading partners.

If you would like to learn how to provide more of these kinds of services to more of your retail partners, please visit the SPS Commerce website where you can receive a free demonstration or ask to speak to one of our omnichannel experts.

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Scott Bolduc

Scott Bolduc

Director of Supply Chain Strategy at SPS Commerce
Scott Bolduc is a multi-time winner of the Supply & Demand Chain Executive Pros to Know. He has worked with e-commerce retailers on their growth strategies and helped retailers transform their freight spending strategies to maximize efficiencies.
Scott Bolduc

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