Amazon has significantly raised the bar for distributors. In this post we look at how distributors can implement software for wholesale distributors and get into e-commerce to compete with Amazon.
In the last few years, companies like Amazon have revolutionized the way organizations across the world do business. The fallout for wholesale distributors is that Amazon has influenced customer expectations, especially regarding order accuracy and delivery time, and if your business falls short of these new standards, then you’ll need to make up for it in other ways in order to attract and retain customers. (There are some good tips on this topic in our whitepaper, “5 Insights Into Wholesale Distributors’ Success.”)
One of the significant ways Amazon has changed customer expectations is through delivery responsiveness: although consumers were at one time happy to wait days or even weeks for online purchases to be processed and shipped, today, they expect rapid delivery. Buyers first became accustomed to speedy delivery (dare we say “spoiled?”) through their purchasing experiences as consumers, and then carried those expectations forward into their work lives. The problems, however, are that smaller wholesale distributors can’t get the same kind of volume shipping discounts and therefore cannot pass those savings and efficiencies on to their customers, and Amazon is getting faster all the time. In fact, in some locations in and around the Manhattan area, the company boasts delivery within an hour. In other areas of the U.S., Sunday delivery has become a norm. Although most distribution businesses will never be able to compete with this, the fact remains that customers—even B2B ones—expect that orders will arrive quickly and efficiently. Today we’ll discuss a few different ways that wholesale distributors can compete with Amazon.
Implement Software for Wholesale Distributors to Track Inventory in Real Time
With current technology, most distribution challenges can now be addressed in real time, by software for wholesale distributors regardless of the size of your business. Current software for wholesale distributors facilitates real-time tracking and management of inventory, meaning you always have full visibility into what’s going on in your warehouse. Not only will implementing modern software for wholesale distributors help you to better plan and forecast, but it will also help you to fulfill orders faster, provide more accurate delivery estimates, and coordinate multiple departments and locations. Together, this all translates to improved efficiency and productivity. With cloud-based software for wholesale distributors and business intelligence dashboards, you can keep close tabs on your inventory to anticipate and prevent low stock or stockout situations. So even if you can’t ship quite as quickly as Amazon, you can make up for it by being better organized, which speeds overall fulfillment.
Implement Business Intelligence and Demand Forecasting
Just as important as tracking inventory in real time, so, too, is it crucial to implement demand forecasting. Whereas inventory management systems allow you to track your inventory and sales, demand forecasting lets you use predictive tools to anticipate what your future inventory needs will be and order efficiently. With the powerful business intelligence and forecasting tools of current software for wholesale distributors you can always be prepared and substantially reduce or perhaps eliminate stockouts while keeping your inventory lean and turning it fast.
Use Software for Wholesale Distributors to Facilitate Drop-Shipping and Cross-Docking Strategies
To cut down on idle inventory and improve turn-around time, distributors can implement drop-shipping and cross-docking strategies. Using a just-in-time approach to inventory management is one of the ways distributors can compete with Amazon. By drop-shipping items directly from the manufacturer to customers or cross-docking, distributors can theoretically get items delivered to their customers quicker, with lower handling costs, less breakage, and no inventory holding costs. To pursue these strategies your software for wholesale distributors must be able to automatically create the purchase order when the sales order is placed, link the sales order to the purchase order and arrange for the purchase order to be drop-shipped to your customer.
Optimize Warehouses for Maximum Efficiency
Although it may not seem like a big deal, shaving a few minutes off your order picking and packing processes adds up over time, and this could make your entire operation more efficient. The easiest way to reduce the time it takes to process orders is by making sure your warehouse is well-organized – this is something that Amazon has down to a science. Along with making your workplace safer and cleaner, organizing inventory based on sales volume and shipment frequency will also streamline fulfillment. You can and should continually re-optimize your warehouse layout and product placement to reduce the time it takes to pick, pack, and ship orders. With software for wholesale distributors that allows pickers to use handheld scanners and leads them along an optimized path through the warehouse, you will also speed up picking and have fewer errors. This will lead to faster delivery times and happier customers.
Get the Right People to Deliver Stand-Out Customer Service
One advantage that distributors have over Amazon is the ability to provide quick, personalized, customer service to your customers. With current software for wholesale distributors, you can deliver the information to your customer service reps in real-time. But, in addition, you also need smart, motivated, capable people to provide stand-out customer service, solve problems and up-sell where appropriate. Distributors should not underestimate the value of offering great, personal, and human-delivered, value-added customer service. Calling Amazon and actually getting a human on the phone is a near impossibility.
Implement Software for Wholesale Distributors and Get into e-Commerce
Amazon got to where it is by streamlining the consumer online shopping and ordering process to the point where they’ve just about perfected it. As much as anyone may dislike Amazon, their amazing one-click purchasing has made the entire process so easy that anybody who wants to compete must have a similarly user-friendly e-commerce site. To deliver a compelling e-commerce offering, your software for wholesale distributors must be linked to your e-commerce front-end stores, and your e-commerce offerings must:
- Act as a self-service portal through which your wholesale customers can manage their orders, update their accounts, see ordering history, and get shipping and tracking information
- Allow retail customers who have found you through search engines to purchase goods at retail pricing
- Provide both wholesale and retail customers with real-time inventory information and accurate lead times
- Give customers different shipping range options and corresponding delivery timetables
- Personalize service and product offerings based on a customer’s needs, habits, preferences, and ordering history
- Be a resource for customers who need to know about your products
- Offer online chat services to customers who need help with the website, finding specific items, order details, and more
It is hard to take on Amazon at its own game, but it can be done.
Track Deliveries Once the Truck Leaves Your Warehouse
If distributors get into e-commerce they will have to be able to monitor and track deliveries just as the ubiquitous Amazon truck drivers do. Implementing the right software for wholesale distributors can give you the ability to push and pull data from drivers mobile apps. This will let you respond to a customer’s enquiry with the precise location of the truck and information as to when deliveries will be completed. That is the standard that you have to meet to compete with Amazon.
To Succeed in e-Commerce, Employ Digital Marketing
To attract e-commerce customers to your website you need to use digital marketing and SEO to ensure that customers searching for your products are finding your e-commerce sites. Competing with the likes of Amazon in this is tough because of the resources it pours into e-commerce SEO. However, there are several straightforward approaches that you can take, and there are many SEO and digital marketing experts that can help you refine your e-commerce marketing so that when users search for the products you carry, your e-commerce site shows up in the search rankings. For example, let’s say you distribute industrial safety supplies. It is unlikely that you will be able to top a search engine result page by vying for the same search terms as Amazon, but what you can do is select some strategic keywords that will help you differentiate yourself from the competition, and work those into the copy on your website. Beyond that, you should also come up with a digital marketing strategy that focuses on social media, email, content, mobile, and, if relevant, local search marketing so that you can actively engage new potential customers. Then, once you have these new customers, putting into place customer retention programs to ensure you keep them will help you compete against Amazon.
Like it or not Amazon and Amazon Business are here to stay. And if we can take anything away from Amazon’s meteoric rise it has to be that Amazon is a ferocious competitor and that it has perfected e-commerce to the point where it is displacing all other selling models. To survive distributors have to adapt, they have to implement powerful software for wholesale distributors and they have to get into e-commerce. If you need more information, please contact us about Accolent ERP, cloud-based software for wholesale distributors that can improve your inventory management, sales, warehouse, and purchasing practices.