A Changing Economy
It’s little secret that the changing economy of the 21st century, with e-commerce, dropship and personalised product selections, has had a huge impact on wholesalers. Many retailers and even consumers are reevaluating their relationship with wholesale and whether they really need to go through a middleman to source products. This line of thinking is how the concept of “supplier disintermediation” came into being. Put simply, it means cutting down the middlemen in a supply chain and going back directly to the source, or as close as one can get to it. This has wide implications on wholesalers and they must change how they work to survive.
Increase Efficiency
It’s prudent to note that the only reason why retailers consider supplier disintermediation is to cut their costs and sell products more efficiently. If wholesalers themselves increase their efficiency to become quicker, less wasteful and indeed more optimised. One key aspect may be delivery time — whilst larger quantities understandably take longer to transport, they must compete with direct-from-manufacturer options that many retailers are considering. A faster delivery time coupled with a streamlined logistical process are key to providing better efficiency.
Leverage the Data at their Disposal
Wholesalers have a marked advantage over other members in the supply chain in one major aspect — Data. You may have heard the rumblings about data being liquid gold in the world of e-commerce and the internet in general, and it’s hard to argue otherwise. Indeed, such corporations such as Facebook would struggle to remain financially viable if people’s data wasn’t so valuable to a plethora of players. The majority of wholesalers still use analog means and don’t have an efficient, digitised database. Using this information to understand consumer and product trends as well as targeted marketing may be a very effective means of challenging manufacturers and dropshippers.
Lower Prices
Finally, the main aspect that brings customers to a wholesaler is their prices. This links in to the previous idea of efficiency in the supply chain — retailers wish to streamline their sourcing methods and get them the best possible deal. Of course, it is difficult to compete directly with manufacturers’ prices, but many wholesalers have been successful in reducing costs by buying larger quantities from their manufacturers and offering a more specialised, niche array of products. Further, changing manufacturers to a different region or country may also yield results. Through creative means, wholesalers must compete in terms of price to manufacturers and dropshippers — they already have a running start and have the weight of tradition behind them.
Thus, wholesalers in the near future will use their inherent advantages and skills to find a place for themselves in the supply chain, despite a move towards a shorter supply chain — supplier disintermediation. As with all companies during changing times, it’s key to adapt to changing market situations in order to survive. It’s a bit like evolution, not every wholesaler will survive, but the strongest will go on to prosper.