Shipfusion Blog

How to Navigate Wholesale in the Supply Chain: Part One

Choosing the right partner can make or break your company’s logistics, customer service, and repeat purchases. Using a fulfillment center like Shipfusion frees you from navigating the fulfillment landscape with zero stress. Below are some insights on how Shipfusion can take your business to the next level.

Managing an elaborate network of resellers can be challenging. Resellers are not your employees, and many don’t have the same level of understanding and commitment to your products as you do. You can effectively scale the business across all resellers with good automation and processes without friction.

Wholesale is a wild and crazy place, and it can get downright chaotic if you don’t have a little bit of direction. What you thought would be a successful profit-making venture soon turns into a nightmare of missed shipments, angry customers, and lots of work. Thus you must take into account all aspects of the supply chain, logistics, warehousing, and even sales/account management to see what will work for you, the suppliers, and the customers.

Which Are the Most Common Drawbacks Wholesales Go Against in the Supply Chain?

The following are some of the most demanding challenges at the wholesale level of the supply chain.

Inventory Shortage & Overstocking

It is not uncommon for businesses to experience inventory shortages and overstock at different times throughout the year.

Sometimes there might be an inventory shortage or overstocking of products due to various reasons such as poor forecasting or wrong forecasting models companies use. These poor models lead to problems such as lost sales or increased costs due to excess inventory. These shortcomings can affect the bottom line of both parties involved in this process, i.e., suppliers and retailers.

Wholesales work hard to ensure they have enough inventory on hand to minimize supply disruptions that might lead to stock-outs and lost sales opportunities. However, when there is excess or unnecessary inventory in the distribution center, then this becomes a problem for both retailers and wholesalers, who may end up spending more than necessary on storage costs.

Poor Visibility into Product Profitability

Another challenge faced by supply chain managers is poor visibility into product profitability. This means that they do not know whether any product sold at the wholesale price would yield a profit or loss for their organization. Therefore, they run the risk of losing money every time they make an order from their suppliers.

The problem often originates from poor real-time inventory tracking systems. Important data in the wholesale management, such as the inventory transport, labor, and storage costs, may be overshadowed when the data visibility is low and cause profit blind spots. Working with a 3PL and fulfillment center can help solve this problem. 

Faster Delivery Demanded by the Retailers

The demand for faster delivery is one of the biggest challenges retailers face, especially in ecommerce. While some retailers may be ready to pay for faster delivery, it comes at a cost, which can be expensive for some of them.

The challenge is that retailers want their suppliers to deliver products faster but don’t want to pay for it. Customer delivery demands may be out of line with the wholesale delivery schedules, pushing wholesale on edge.

In addition, some customers expect free shipping, which can be a real challenge.

Next Week: Understanding Inventory Optimization

Shipfusion sets your business on autopilot and combines flexible, reliable fulfillment with powerful, real-time technology. Shipfusion has multiple fulfillment centers across the US and Canada– making it easy to manage your eCommerce business. For more information on how to set your business on autopilot, contact one of our fulfillment specialists today.