In the retail world that has seen more change, disruption, connection and new successful entrants, the role of wholesalers has changed forever. Wholesalers need to be business builders for their retailers and fully focus on the end consumer.

The last 5 years have seen a large reduction in the number of wholesalers with many large long-running businesses closing down. The main reason for this reduction is that they thought they could operate the same way they always have in a rapidly changing retail world.

The internet has revolutionised the world, retail included. Ignore it at your peril. The internet is not only a wonderful sales tool, it is also a global sourcing tool. In the past, Australian wholesalers had the advantage of being on an island and supplying under-resourced retailers who did not travel overseas to source products (for the most part), our distance from the rest of the world meant that considerable freight costs and time frames inhibited the average retailer sourcing their own products.

All retailers operate in a global marketplace, customers can search and shop the world, so wholesalers must source collections and pricing need to be able to be favourably compared. Gone are the days when wholesalers could go overseas, buy an eclectic collection of products at a great price and offload it onto retailers.
They need to be aware of many more elements than in days gone by.

They need to consider:

  • Trends
  • Styling
  • Retail Competition – global, not local
  • Assortment in store
  • Visual Merchandising
  • Sales Tips & Language
  • Sales Support for retailers
  • Supply Chain
  • Order lead times

Wholesalers also need to realise that online stores who don’t have a bricks & mortar presence are bona fide retailers! Recently one of my retail clients was told by a larger Australian Homeware Wholesaler that they would no longer supply to them because they ‘only’ sell online. Their agents knew they were online with no physical store and took their $13,000.00 order but when HQ realised, they stopped supply

I was GOBSMACKED!! In 2016 for a large wholesaler to be doing and saying this was unbelievable to me.

To say it cost my client time and money was an understatement.  Wholesalers should be business partners to their retailers and if mistakes are made, they should be part of the solution not make the problem bigger.

Gone are the days where wholesalers could take orders at trade fairs, place the order on their supplier and deliver orders 8 – 12 weeks later.  Wholesalers need to hold stock and supply regularly. Forcing retailers to buy large minimum orders is not good business for anyone long term.

At the end of the day, the wholesalers’ business lives or dies by their customers’ (retailers) success. Success is reliant on good business practices and keeping up with the changing marketplace.

Retailers are often pre-occupied by the day to day running of the business and don’t see a lot of the innovation, trends or tools in the greater retail marketplace. Wholesalers need to be the eyes and ears of their customers and inform and advise them. By creating partnerships that are mutually beneficial creates good business for everyone.

Australian wholesalers have not changed fast enough on the whole. Retailers who are new or adopted digital faster than their supply chain, have sourced their own products and by-passed wholesalers.

Some tips for wholesalers to focus on to navigate the changing retail environment:

1. Sell online – wholesale and retail

Wholesale margins are low, the cost of freighting and storing stock is expensive.

With erratic retail sales, relying on retailers to pull through volume is dangerous.

2. Make your customers the stars of your site so the consumer can find stores near them & if none still be able to buy the product that you have invested in.

Encourage your customers to buy a larger percentage of a range for a bigger mention or feature on your site.

3. Work with suppliers to shorten lead times

Manufacturers understand the changing customer demands, so find those who have kept up to date and offer solutions to quick delivery.

4. Find fast, cost effective freight and delivery

5. Share tools and ideas with customers

You will notice I haven’t focused on products much in this post, more about the attitude and business practices. These are the tools that will create better retail.

Retail is a great industry and partners who are passionate, resourced and informed will create better businesses for everyone!

 

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