A New Rivalry — Wholesale in the era of B2B Business
Wholesale as a business model has survived for a long time not only due to its resilience against new market trends but due to the inherent advantages that a business-to-business model has. These include a deep understanding of the market and a relationship with their suppliers, a resilience to market forces due to buying large quantities at lower prices and dealing with a smaller number of clients in the form of retailers as opposed to the general public. Thus, perhaps predictably, the biggest current challenge to wholesalers in this age is not the new supply chain models such as dropshipping, but other B2B competitors. The largest of these can have both immense capital and the business connections to use it effectively, hence causing smaller wholesalers a huge challenge in maintaining relevance.
Perhaps the most significant player in this new wave of huge B2B corporations is Amazon Business, which has disrupted the market like few before. From being a relatively small player in 2018, it has grown phenomenally to reach $25 billion in sales worldwide and putting small wholesalers out of business in the process. So how do these aforementioned wholesalers remain competitive in this market?
A Personalized Experience
While huge wholesale conglomerates can offer many things which appeal to retailers, least of all the low prices, there’s the personal element where small wholesalers win out. Customers — the public and retailers alike — all consistently appreciate a tailored experience as opposed to the impersonal nature of high companies such as Amazon. Hence, it is key to have a streamlined customer support system to handle complaints and issues, as well as offer customers personalized deals and packages to incentivise them to continue working with you as opposed to a large corporation with lower costs. Personalizing the logistical, technological and human bits of the wholesaler-retailer relationship is key to a successful wholesaling business. This has also been shown to both increase customer loyalty and help turn interested retailers into solid customers, thus increasing the wholesalers’ revenue in the long run.
Be What the Big Wholesalers Cannot
It’s important to emphasize that it is very difficult indeed to compete with big wholesalers on prices; that’s their key advantage that they’ll hold in most industries and It will simply have to be accepted in order to contemplate how to compete with them. These huge wholesalers often do not have the small-scale understanding of markets that their smaller counterparts do. This deep understanding is key to developing a niche in their industry and targeting their marketing efforts to the clients in the aforementioned niche. Further, supplier relationships take a long time to develop and large wholesalers simply use their volume to extract a deal to their favor, which may force suppliers to compromise on quality. Small wholesalers can leverage their relationships with suppliers to not only get an excellent deal but also acquire the right kind of products for their market. Supplier knowledge of the market is key to bringing the right products to customers.
