ADS Solutions Wholesale Distribution Software Blog

GDPR, or the General Data Protection Regulation, is a European regulation that governs how the personal data of individuals within the European Union is collected, stored, and used.

Disclaimer: This is not an official EU Commission or GDPR resource. This in no way constitutes legal advice. Any person who intends to rely upon or use the information contained in this document about GDPR is solely responsible for independently verifying the information, and obtaining legal advice if required. To read the official GDPR document, please visit eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32016R0679&from=EN.

Does GDPR Affect US-Based Distributors?

Even if you are only selling goods to individuals or businesses in the United States, U.S. distributors should comply with GDPR if your website is open to visitors from the EU and UK, and that website collects personal information from visitors like email or IP addresses.

To What Extent Do Distributors Need to Comply with the GDPR?

1.) If you are not selling to companies in the EU, but if you have a website that’s open to EU visitors, then you should comply with GDPR if any of the following conditions hold true:
• You have web forms (like contact forms or newsletter sign-up forms, for example) on your website that collect personal information like email addresses or location
• You use Google Analytics, and its tracking code is installed on your web pages
• You use any type of cookies, including tracking codes or the Facebook pixel
• You take payments on your website from people living in the EU
• You allow your customers to create accounts on your website, and some of those customers are residents of GDPR countries in the EU or UK
• You have any 3rd party plugins on your website that transmit personal data
2.) If you are selling to companies or individuals in the EU, then you must comply with GDPR.

If none of those conditions apply, then don’t worry. There’s no action you need to take as of this writing.

Understanding GDPR

The main objective of the GDPR is to protect individuals residing in the EU and UK against the violation of their privacy. It requires personal data to be collected and stored in a fair and transparent manner.

Definitions of GDPR Terms

“Personal data” are things like your website’s visitors’ names, phone numbers, email addresses, and all information related to their religious and political views. It includes their IP addresses, locations, photos, and extends to their health, biometric, and genetic data, as well as their sexual orientation, race, and ethnicity.

“Fair” means that companies process the minimum data they need to be able to provide their services. Certain fields on web forms, for example, “salutation,” that looks for gender, social or marital status like Mr. Mrs. or Ms. are not necessary information for most businesses. So, eliminate these types of fields from your web forms. GDPR encourages companies to collect as little information as possible.

“Transparent” – GDPR requires companies to tell visitors, in advance, what information they are collecting, for what purposes they are collecting it, and for how long they plan to store it. The information must be presented in “a concise, transparent, intelligible and easily accessible form, using clear and plain language.”

How Will GDPR Be Enforced?

The EC has appointed Authorities in each of the EU and UK countries that will enforce GDPR. In the US, they will call upon the FTC to enforce GDPR for US companies who fail to comply.
It is too early to detail the exact process for GDPR enforcement, but at this writing, it is believed that complaints registered against non-GDPR-compliant businesses will be registered then passed off to the respective Authority in the country where the non-compliant business is located.

What Are GDPR Fines?

DPReu.org has defined 2 infringement levels, the lowest of which constitutes up to €10 million, or 2% of your annual revenue of the prior fiscal year, whichever is higher. Worst case scenario, penalties can be up to 4% or €20 million of a company’s annual revenue, whichever is higher.

In Practical Terms, What Do I Need to Do To Comply?

In practical terms, if your company doesn’t specifically target its goods or services to individuals in the EU, it is unlikely that the “GDPR police” will come after you before other larger EU-based companies. However, given the potential of steep fines and the ease of compliance, it is sensible for US businesses to comply with GDPR. Plus, following GDPR creates a better user experience for your website visitors and customers.

Update Your Website and Marketing

• At the very least, update your website’s Terms of Use and Policy pages so that they
explicitly comply with GDPR. For more information, see this blog post.
• Let your website visitors know what cookies your website uses, what the cookies do,
and require visitors to accept your cookie policy.
• Add opt-in checkboxes to your web forms.
• If any of your email recipients live in GDPR-affected countries, require them to opt-in
again to your mailing list.
• Delete the contacts and lists you no longer use.

Is There an Easier Way to Comply with GDPR, Without Modifying My Website?

If you own a website or business that only serves customers in the US or Canada, then instead of making all the necessary changes on your site, you might find it easier just to restrict all visitors from all IPs in EU countries if you don’t need website traffic coming from those EU countries.

The easiest way to block traffic from EU visitors is at the web server level, directly through your host. You can also manually enter IP address ranges by country into your .htaccess file. Regardless how you block these countries, make sure you whitelist your host if they have support offices located in the EU.

If you are actively marketing to anyone who is a resident of GDPR-protected countries, then it is recommended that you comply with all required consents outlined in the GDPR.

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.