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“.) This post will focus on how distributors can compete with Amazon on delivery responsiveness.
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 I 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 that 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.
Distributors Can Compete with Amazon by Tracking Inventory in Real Time
One of the benefits of living in the modern age is that most distributional challenges can now be addressed in real time, regardless of the size of your business. New technologies mean that the inventory management systems of old (think pen and paper manual management) are being replaced with software that facilitates the 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 ERP software 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. Another great thing about modern, cloud-based distribution software is that you can automate the monitoring, meaning you can create alerts that notify you when it’s time to replenish inventory, without having to put in any extra effort. So even if distributors can’t ship quite as quickly as Amazon, they can make up for it by being better organized, which speeds overall fulfillment.
Distributors Need a Materials Requirement Planning Solution to Compete with Amazon
Similar to the importance of using software to track inventory in real time, so, too, is it crucial to implement materials requirement planning. Whereas inventory management systems allow you to track your inventory and sales, materials requirement planning lets you look holistically at your demand, your supply, and your current inventory so that you can plan, organize, and order efficiently. The key to inventory management is making sure that you have the right items available at the right time to fill orders, but without having a surplus of inventory taking up space in your warehouse. In other words, materials requirement planning is all about finding the sweet spot between having the fewest possible out-of-stocks with the leanest inventory.
Automating Purchase Orders Helps Distributors Compete with Amazon
Not all distributors need to carry full inventories. Often, wholesalers have limited shelf space in their warehouses, and prefer to put their working capital to a higher and better use. 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 their manufacturer, distributors can theoretically get items delivered to their customers quicker, with lower handling costs, less breakage, and no inventory holding costs. The key to drop-shipping (or cross-docking, as it is sometimes inappropriately called) is to have ERP software that automates your purchase order process. So, as soon as a customer places an order for one of your non-inventory items, your software automates the purchase of that item and arranges to have it shipped to your customer.
Distributors Should Organize Their 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, and you can bet that Amazon has this down to a science. Along with making your workplace safer and cleaner, organizing inventory based on sales volume and shipment frequency will also streamline your processing powers. Over the course of a year, this will drastically reduce the time it takes to pick, pack, process, and ship orders, leading to faster delivery times and happier customers. Optimizing your warehouse for quick picking is another way distributors can compete with Amazon.
Distributors Need the Right People in Place to Deliver Stand-Out Customer Service
With a heightened emphasis today on technology-based solutions, sometimes it’s easy to forget the human side of running a business. You still need to have good people with good judgment in place to make day-to-day decisions and ensure things run smoothly. No matter how many processes you automate or how much software you install, you still need intelligent, capable people behind the scenes with the right training, the right skills, and the right experience to manage others, to configure your technology, make on-the-spot judgment calls, upsell your products, and provide stand-out customer service. No matter how much you’re able to automate, you cannot overlook the importance of HR. If there’s one key aspect where distributors can compete with Amazon, it’s customer service because this is an area where Amazon is sorely lacking. Calling Amazon and actually getting a human on the phone is a near impossibility, so offering great, personal, and human-delivered, value-added customer service can help distributors of all sizes compete with Amazon.
Distributors Can Compete with Amazon by Bringing Their Business into the Digital Age
Another way that Amazon has fiercely stepped-up their game is by streamlining the online shopping and ordering process to the point where they’ve just about perfected it. Before there was Amazon, the consumer shopping experience ranged anywhere from tolerable to downright infuriating, but Amazon’s focus on 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. The same holds true for B2B companies because, in the end, even the retailers and businesses you sell to are operated by people, and people love the convenience of online shopping. However, not just any old e-commerce site will do, and if you want to compete in the big leagues, then you’ll need a site that can:
- 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
Without an e-commerce website that updates your core inventory, accounting, and warehouse system in real-time, it is difficult for distributors to compete with Amazon.
Distributors Can Locate New Customers with Modern Digital Marketing Techniques
Another way distributors can compete with Amazon is by actively seeking out new prospects with a digital marketing strategy. Marketing is important because although giants like Amazon have become experts in e-commerce SEO, you can still secure a large enough customer base to remain competitive, even if you can’t keep up with all of Amazon’s practices. The key here, however, is bringing your efforts into the modern age, and you can start by optimizing your website so that customers will find you more easily when they go looking for products that you have. If you’re a distributor and would like some tips on optimizing your website so you can better compete with Amazon, please contact us.
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.
For smaller distributors, competing with Amazon may seem like a futile battle, but there are in fact many ways that you can make your distribution business stand out, attract a new customer base, contend with Amazon’s delivery responsiveness, and remain relevant in a world where online giants like this exist. The keys to competing with Amazon include using the right systems and software to track and manage inventory in real time and organizing your warehouse for maximum efficiency and expedited order fulfillment. For wholesale distributors to successfully compete with Amazon, improving delivery responsiveness is only one piece of the puzzle; it will take more than just maximizing operations to succeed. The other things that help distributors compete against Amazon are being able to attract new customers through modern digital marketing strategies and implementing an engaging and responsive e-commerce site that:
- welcomes new customers
- is easy to use
- moves visitors through the sales funnel
- and that encourages visitors to return again and again.
For information about distribution-focused software solutions that can improve your inventory management, sales, warehouse, and purchasing practices, contact ADS Solutions today.