3 Trends Driving Growth in the Wholesale/Distribution Industry

September 3, 2015

Wholesale Distribution TrendsDistribution businesses have become increasingly complex with ample opportunities to serve many different customers globally. In the United States alone, wholesale/distributor sales equal approximately $3.2 trillion, which also accounts for roughly 7% of private industry GDP since 1987[1]. The reason for such staggering numbers is partially because distribution spans many large market segments, ranging anywhere from grocery and food-service to furniture and home furnishings. Driving this growth are 3 factors that distributors are finding increasingly important:

(1) Investment in Technology:

Many distribution business owners are beginning to realize the importance of making data-driven business decisions. Unfortunately, many companies are currently stuck using older software systems which are not providing relevant information in a timely and effective manner. As a result, the focus has shifted to implementing truly integrated software that will tie the different facets of the business, (such as order taking to warehouse management to accounting) together. The result for companies who move in this direction is a system that provides real-time information across departments in a timely manner to facilitate effective decision making. For example, a salesperson on the road will need access to updated pricing, product availability, and customer information among many other pieces of information. This highlights the importance of a system that will provide information to all areas of an organization, be it in the warehouse or on the road at a customer’s location.

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Beware the RFP When Evaluating Wholesale Software

August 28, 2015

RFPYou may have heard the term RFP before used in a business setting, or perhaps your company has even considered issuing one.  For those unfamiliar with the term, RFP stands for “Request For Proposal” and according to Wikipedia is “a solicitation, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals.” RFP’s are often preceded by either an RFI or RFQ  – or sometimes both.  An RFI is a Request for Information and an RFQ is a Request for Quote.

RFPs are used in a variety of industries and can be submitted when companies wish to receive information about specific wholesale ERP software.  In general issuing an RFP informs the software vendor that your company is actively searching for a new system and provides additional information such as:

  • Background information on the company and how it operates
  • What prompted the search and where the need for software derives from
    • This includes information on current challenges and opportunities
  • What specific functionality is required
  • Who will be competing for the final sale
  • The process for making a decision

Due to the amount of information included in a typical RFP, the documents themselves are quite long.  Taking this approach to finding a new software solution may seem beneficial, but these types of documents are becoming less and less common and are not ideal for smaller businesses.  Below we have highlighted some important factors to keep in mind before deciding to issue an RFP, RFQ or RFI.

Are you able to document your existing processes in significant detail?

Small businesses may not have formal procedures in place to document and submit as part of an RFP.  In this situation it is often while working through the sales process and having discussions with software vendors, that businesses are able to better identify their existing processes and areas for improvement.  Many small businesses take advantage of speaking with software vendors to get advice on how to best improve their existing processes and how software can help them achieve this.

In addition, for businesses coming off of introductory type systems, they may not be fully aware of all the features available to them as part of a proper wholesale solution.  This can make documentation difficult and time consuming and can result in incomplete information.

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“I can’t afford wholesale inventory software, it costs too much”

July 14, 2015

wholesale-software-costsWith any major purchasing decision, budget is an important factor. When it comes to purchasing wholesale inventory software, sticker shock is common for those moving off of introductory systems or manual processes.  However, as with any capital expenditure, buying new software should be a decision made on more than just cost – if you want to make the right investment. The same principles apply as if you were such as seeking new warehouse space. So how come cost continues to be used as a deal breaker? Before you narrow down your software options based on cost, consider the following:

Too expensive compared to what?

Expensive is a relative term.  When it comes to software, make sure you think about what you’re comparing the cost to.  Most comparable Tier 2 systems will fall within a similar cost range, so it’s important to first identify which Tier will have functionality to meet your needs. Many companies start off with an arbitrary budget based on what they feel they should spend, and not on any real world frame of reference.  Are you comparing the cost to other systems? To hiring additional employees? To purchasing more equipment?

How much will it cost you to do nothing?

Another cost to consider is the cost of doing nothing.  Businesses who do not take this aspect into consideration are falling prey to omission bias – the tendency to judge harmful actions as worse than equally harmful inactions.  Not purchasing software can affect costs directly by resulting in a new hire or indirectly through lost productivity. When it comes to hiring employees, good software should replace the need for additional staff which will save you more than just the cost of a system in the long run.

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3 Traits of the Perfect ERP Sales Lead

February 10, 2015

Guest Post by Samantha Hornby

Perfect Sales LeadAs a sales person, I speak with prospective customers every day to try and understand their wholesale inventory software needs to determine whether or not our solution would be a good fit.  Based on the industry they are in, features they are looking for, budget and business processes, it is easy to determine fit after only a 10-15 minute discussion.  As a software vendor however, I am also looking for certain characteristics of the companies I speak with that would also make them great to work with.  Just like companies evaluate vendors, vendors also evaluate companies and there are certain traits that make for the “perfect ERP sales lead”.  These traits usually imply that a company is looking to build a long-term relationship with their ERP vendor, are open to improving processes and believe in the power of software to help them do so. They see implementing software as a strategic investment and not a necessary evil. Below I have compiled a list of the most important traits that I watch out for, and based on my experience, having these traits plays a significant role in the benefits gleaned from implementing new software.

The best ERP sales leads…

Are not limited by budgets and timeframes that are set in stone.  I know what you’re thinking – of course an ERP software vendor would love for all customers to have open wallets, and that sales people all have dollar signs in their eyes, but this is not always the case. When it comes to a project as significant as finding new ERP software, it is important to have a budget in place and to understand what your company can afford.  But even more important is making sure that you’re finding the best solution for your company and not missing out on opportunities because of budget.  Smart and innovative companies recognize that there are a lot of unknowns when first establishing project plans, budgets and speaking with vendors.  Having some flexibility when it comes to ERP software costs is important to significantly improve business processes and find the right software for your company.  This is why costs should only be one of several factors that affect your decision, and not the end-all, be-all. In addition, having a hard timeframe, could lead to a rushed implementation in which case you don’t spend the time properly evaluating software fit and function.

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Is Cloud Based Wholesale ERP Software Right for Your Business?

January 27, 2015

is-cloud-erp-software-right-for-your-companyDeciding to make the switch to a fully integrated ERP system as a wholesale distribution company – whether you’re transitioning from existing software or manual processes – requires a lot of time and resources.  It also involves making a choice between implementing a system on-premises or hosted through the cloud.  So which method is better suited for your business? Although there is no single right answer to this question, there are certain elements that could make a strong case in favour of a cloud solution.  Companies are increasingly opting for this method from the get-go, and others are switching from their current on-premises installation. To better understand why and when it would make sense for your company to seriously evaluate hosting software through the cloud, let’s first take a look at exactly what we mean by each implementation method.

On-premises software was historically the only option available to companies looking for wholesale ERP software which made it more feasible for larger companies.  On-premises refers to software applications installed on-location on a client owned server.  This requires up-to-date hardware and either internal or outsourced personnel for IT management.  It also requires a bit of a larger initial investment when it comes to cost as companies buy the software licenses outright.

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POS Functionality & eCommerce Integration for Wholesale Distribution Companies

October 16, 2014

POS and eCommerce ERPAs B2B and B2C eCommerce continues to increase in popularity, the line between wholesale, retail and eCommerce channels has started to blur. Wholesale companies, previously restricted to buying product from the manufacturer, storing in a warehouse and then selling and shipping to retail and distribution companies, are now starting to offer their product through other sales channels and to different consumers. With eCommerce sales expected to reach US $1.5 trillion by the end of this year, it’s no surprise that wholesale companies are interested in a piece of the eCommerce pie. Many wholesale companies have also branched into the retail space, by opening showrooms for their product, exhibiting at trade shows and building actual brick and mortar retail stores.  In order to account for these new sales channels in an all-in-one system, it is important to look for proper inventory and accounting ERP software, with point of sale (“POS”) functionality and eCommerce integration options. This way all data can be stored in a central database, and consequently inventory levels and availability will be accurately reflected no matter which sales channel an order comes in from.

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4 Popular Features to Look for in Wholesale Inventory Software

October 1, 2014

wholesale inventory software

When your business decides to take the crucial step to invest in wholesale inventory software, it is imperative that you make a thoughtful and well-informed decision that satisfies your business’s specific needs. With an abundance of features and customizable options available, achieving this task can sometimes be overwhelming. Although no two companies are exactly the same, there are several popular features that add value to basic inventory software and allow companies to better manage all business operations. These include; landed cost tracking, barcode scanning, sales rep applications, and lot tracking.

Landed Cost Tracking

Landed cost refers to the total cost of an inventoried product, taking into account expenses incurred to collectively purchase, transport, and import goods. Costs accounted for include such items as border fees, duties, taxes, transport costs and insurance, to name a few. Software that effectively manages landed costs has the ability to automatically account for and reconcile the costs mentioned above in order to arrive at the true cost of the goods. This ultimately enables businesses to protect margins and make better purchasing and pricing decisions.

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