We all know how tough the business environment is today for distributors. At every turn it seems like there is another challenge to overcome whether it is persistent inflation, a broken Supply Chain or a looming recession. And growing sales is especially challenging as many customers are cutting back on their purchases. So, what can you do to grow your distribution business and increase profitability? All these challenges are systemic and out of your control – right? Wrong. There are things you can do. Business intelligence (BI) and data analytics for distributors helps your business by increasing sales, improving processes, cutting costs and improving margins. And data analytics for distributors can help you to make better and faster decisions. Data analytics for distributors can help you to slice and dice your ERP data to uncover real insights into your business.

Data Analytics For Distributors Helps Grow Sales

There are many studies that have shown that data-driven companies typically grow faster and see an increase in sales. McKinsey found that companies that analyze their customer data to find out what their customers are buying and why, far outperform their competitors on Sales, Sales Growth, Profit and ROI metrics. Data analytics for distributors can help you analyze your existing customers’ buying behavior to uncover many hidden cross-sell and up-sell opportunities that may be much easier to capitalize on than finding and winning new customers. For example, many customers buy several products together, and data analytics for distributors lets you search for and find those customers that are buying only one or two of those products but not others. You can then research why customers aren’t buying the other products and then you can offer incentives on these. Data analytics for distributors helps you find these simple up-sell opportunities that you might not be aware of without the tools to find them. Another example might be for products that are purchased together, but some have sales that are rising, and some have sales that are falling. Researching this might signal, for example, that customers are substituting one product for another. With early-warning alerts like this, you can outpace your competitors by modifying your purchases to make sure you have stock of the products being switched to and find ways to clear out the products that customers are substituting away from. Data analytics for distributors helps in many other ways to analyze your data to better predict your customers’ behavior and then to act on these insights to grow sales.

Evaluating Inventory Performance

Most distributors’ biggest investments are in their inventory. Data analytics for distributors lets you analyze which products are moving and which are not and comparing these to the cost of stocking the products and their margins can lead to many very powerful insights that can help you cut costs. For example, an inexpensive product with a low margin but that moves quickly could have a higher ROI than a more expensive product with a higher margin that ties up more capital and moves slower. You might want to evaluate opportunities to cross-dock and/or drop-ship certain higher cost products.  Continually analyzing how your inventory is performing and how this changes product by product, over time can have huge cost-saving implications for your distribution business. Data analytics for distributors can help you keep inventory investments at target levels with as wide a selection of goods as possible, and avoid both dead stock that isn’t moving, as well as lost sales opportunities due to insufficient safety stock.

Navigating Supply Chain Issues

Every distributor has struggled with the broken Supply Chain issues that arose with the Covid-19 lockdowns. This has necessitated a general rethinking of how distributors source their goods. The old model of having one or two go-to suppliers is no longer practical in many cases. Many distributors have now broadened their supplier networks to build in supplier, geographic and logistical flexibility. However, this increases the need for you to continually analyze the data to determine which suppliers are worth keeping and which are not. In addition to product quality, data analytics for distributors lets you evaluate suppliers on their ability to fill purchase orders correctly, how long it takes to supply the goods, terms, price, availability of the goods, and relationships with delivery vendors. Data analytics for distributors can help you capture and assess the data to identify early warning signs such as if an otherwise reliable supplier’s delivery times are going up or fill rate is going down. This information lets you take steps to protect your business and your customers. This customer goodwill in turn will help you to preserve and enhance your customer relationships and outpace your competitors.

Improving Processes

There is always room for process improvement particularly with warehouse operations that are typically very labor intensive. In order to be able to make good process improvements though you need to be able to assess where the process improvements can be made and how they can best be implemented. These determinations are inherently data-driven. For example, data analytics for distributors lets you evaluate whether problems with the productivity of your picking operations might be caused by your warehouse layout, or by the steps in your picking process, or the picking patterns you are using, or it might be a factor of the pickers themselves. Analyzing the picking productivity data along a number of different dimensions can help you understand what processes are not working for you. Data analytics for distributors then lets you make changes to your businesses processes to reduce costs, improve productivity and will lead to higher margins. You might also be able to benchmark particular pickers or processes that are delivering better results and use these as models or examples.

Improving Decision Making

There are a huge number of ways in which business intelligence and data analytics for distributors helps to make better, more-informed data-based decisions faster. Particularly in a challenging and rapidly changing environment, knowing when there are problems sooner than your competitors lets you take steps to address these and gain an advantage over your competitors. Data analytics for distributors allows you to access your ERP data in real-time to evaluate and assess the data and look at various “what-ifs.” Emphasizing data-driven decision making will also help facilitate building a solutions-focused organization. Distributors’ employees are usually closest to the problems and will typically see these first. By giving employees access to data analytics tools, rather than just reporting problems they can find and propose solutions. This employee empowerment can have very far reaching effects and will always result in better solutions.


If you want to want to find out more about what industry-leading BI and data analytics for distributors can do for you, contact us. We can show you how the integration of Accolent ERP with Phocas Software’s data analytics can help your distribution business grow sales, cut costs and improve margins.