Managing Multiple Wholesale Resources At Once

by Wholesale_Manager on 09-23-2012 in Wholesale Center

Managing Multiple Wholesale Resources At Once

While it would be wonderful if a single supplier carried every product needed by a retail business, in reality retailers that carry a wide inventory of items for sale need to work with multiple wholesalers. This is good for a number of reasons. First, working with just one supplier for your entire business would make your retail company very vulnerable to coercion and demands by your wholesaler if he practiced bad business. Second, having the ability to rely on multiple suppliers provides a safety net when one of them may not come through in the clinch.

Multiple Wholesale Supplier Management

The above said, managing multiple suppliers is a task in itself. It requires keeping track of inventory from different sources as well as keeping everyone on track to meet deadlines and delivery dates. At first, this may seem very simple. All a business has to do is order more supply when it’s needed, right? Wrong. Wholesalers often need lead time for large orders. Further, to keep ongoing supply working, a retail business needs to keep constant inventory control to then inform suppliers when re-stocking is needed. This is particularly important when a lot of stock moves off the shelf quickly within a few days such as groceries.

Benefits of Using Multiple Wholesale Suppliers

There are benefits to being involved with more than one wholesaler. A retail business supplied from multiple sources carries a far greater range of product as well as prices. This allows that retailer to be more competitive as well as meet far more niche needs of customers. Over time this can develop quite a customer base that can’t be matched by other retailers, depending on the product sold.

That said, the challenges increase as well. As discussed in other resources, the best linkage between a retailer and a wholesaler is an automated ordering system. This requires that the retailer and the supplier are working with the same or compatible data management format. However, when multiple wholesalers are involved, order communication can complicated very quickly. The last thing a retailer wants is to be managing five or six different ordering formats. So, some planning has to be involved in making sure the wholesalers chosen can work with the same system. This may even require the retailer to have to change its own system to one that is common with all the suppliers used.

Another challenge will involve averaging the cost of supplies and shipping, which will very likely vary between wholesalers. Instead of using their exact figures, the retailer will have to work a bit of math and find a common average or cost range to assume on each order. Then the retailer can turn around and apply a percentage markup to cover the needed profit margin. This gets out of the extremely complicated hassle of trying to track the specific cost numbers of each supplier. However, this is far harder where the profit margin may be a few pennies on a large amount of units sold.

A few additional tips can help where they apply:

• Where your business is working on a large customer project instead of using with multiple suppliers have one main wholesaler be the lead with subcontractors being managed by the main supplier as an “integrator.”
• Use an incentive system to help the suppliers chase after performance and keeping things on track. This reduces the work a retailer has to do pushing the involved wholesalers to be timely. Instead, the suppliers will willingly push their own systems so they can earn the offered incentives. This can be in the form of payment bonuses, a share in end retail profits, or some other kind of compensation.

There is no “perfect” approach to managing multiple suppliers. Further, it’s an ongoing process of wholesale supplier monitoring, relationships, motivation and cooperation. Understanding how this process works will go miles for a retailer both growing its own market as well as maintaining good support from suppliers.



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