Wholesale business is growing day by day for several reasons and so is the economy. Entry barrier is quite low and it provokes individuals to start wholesale business but many of them do not get the real story. We all know that wholesalers are facing many challenges in trading such as: inflation, growing operating costs, emerging competitors, lowering profit margins and demanding customers. Wholesale business works well with efficiency. The biggest efficiency is to understand inventory and supply chain management. Understanding the importance of managing the inventory and proper distribution is very necessary. For instance; if a wholesaler will keep more than enough inventory, he will surely waste enough of it. If a wholesaler will have little stock in hand he can not cater the customers’ demands completely so he will have to lose them.
We consider that wholesale business is all about selling goods and making profit but the concept is changed. Right now selling product is important but main priority is to sell value-added services with the products that wholesalers sell such as speedy and safe delivery and in-time response to the customers. Here comes the importance of supply chain management which reduces the cost along the process. Nowadays wholesale business works on the fact that what is different that wholesalers have to offer to their customers. SCM is important for wholesale distributors and suppliers to sell high quality products and create a competitive edge over the competitors as all want to grab customers and keep them along. It is because nowadays competitive edge does not mean only to sell products at lower prices but to offer something more with a difference.
A wholesale business has to develop core competencies to distinguish it from the others so that customers can understand this difference and rate you high as compared to competitors. SCM allows trading companies to evaluate themselves and discover their own core competencies. What best a trading company can do to achieve its overall objectives and what it can not do well, so outsource it. Survival of the fittest is the new wholesale business strategy and SCM is the only way out to be the best to survive. Supply Chain Management will not only impact on market positioning of a wholesale business but also help them in various decisions like choosing the best option, utilizing the resources and manpower.
I can summarize the importance of supply chain management in few words that it does not give a wholesale business productivity advantage but also value advantage.
