See pages where the term wholesale deal is mentioned. Features of wholesale trade

Wholesale is the sale and purchase of goods. Workers in this activity provide a link between producers and consumers. Sometimes a whole organization becomes a client of a wholesale enterprise. It is essentially both a buyer and a consumer. But most often there is one or more intermediate links. While the product has completed its entire journey from the wholesaler to the consumer, it usually passes through 2-3 intermediaries (retailers).

Wholesale marketing includes any type of activity related to the sale of services and products to people who will resell them or use them for personal or business purposes.

What is wholesale?

Wholesale trade is one of the types of economic activity that contributes to the establishment of links between suppliers and buyers. During their interaction, each has its own benefit. Buyers get an affordable product, sellers get a profit.

At the moment, wholesale trade is developing very rapidly, suppliers and their area of ​​\u200b\u200bactivity are expanding day by day. This is due to constant profit, good income. In addition, the emergence of new suppliers is beneficial for buyers, as the range and competition between them is growing. This invariably leads to a reduction in the cost of production and, as a result, a decrease in prices at the final outlets.

At wholesale there is no fixed quantity of the delivered goods. An agreement is concluded between the supplier and buyers, which indicates the amount and number of products. It can only be said unequivocally that trade is carried out in batches. Usually delivery is focused on the subsequent resale to the final buyer.

Wholesalers and their differences from retailers

A wholesaler is a company or an individual who carries out a related activity. It provides its services not only to organizations retail, but also to manufacturers and their sales offices.

The wholesale center and the people who carry out this activity differ from the retail ones in some characteristics:

• Advertising minimization. The wholesaler deals with professional customers who collect product information themselves. Only end users are interested in advertising.
• The maximum size of transactions, as well as a large trading area. In comparison with retailers, these parameters are several tens (or even hundreds) times higher.
• Different positions regarding legal norms and taxation by the state.

Sometimes manufacturers bypass wholesalers and sell goods on their own. But it is focused mainly on small businesses. Large manufacturers prefer not to waste time looking for customers.

Wholesale trade and its essence

The wholesale trade center initially interacts with manufacturers. He goes to the sales office, where he “picks up” a certain amount of products (sometimes all goods). Then he goes to retailers, we distribute the batch between them. Again, sometimes all the goods are taken by one representative or company. After that, the products are delivered directly to the sphere of personal consumption.

The most important task of this type economic activity is the regulation of supply and demand. Trading centers, in fact, can successfully cope with it, since they are the so-called intermediate link. Some of the goods they hold, then the demand for them will increase. Also, in order to increase the supply, the products are supplied to the market in abundance.

It should be noted that the activity of wholesale trade is significantly limited. It can only work with the data that is given to it. It cannot influence the sphere of production or final marketing. And certainly it does not have any direct impact on consumers.

Wholesale functions

Wholesale trade enterprises are sources of communication between individual regions of the country, and also in a global sense, they contribute to the interaction between states, both neighboring and distant. This is their main function. But there are also minor ones:

• Stimulation manufacturing enterprises regarding the creation of new products, the modernization of old models and the widespread introduction of modern technologies.
• Participation in the creation of a range of goods and services, monitoring the state of the market.
• Taking on business risk. Some items may become unmarketable. Therefore, there will be no demand for them among retailers. It will not be possible to return the invested funds.
• Organization of warehouse operations, provision of all conditions for the storage of certain products.

Finally, it must be pointed out that the wholesale trade in products is intended for one more function. She is engaged in the delivery of goods to the retail network. Otherwise, they will not see the end user.

Retail and customer service levels

Wholesale and retail trade are very similar. Both of these concepts imply that activities related to the sale will be carried out. But retail sales - the sale of products to end consumers who will use it for personal purposes, far from commerce.

In the activity under consideration, there are several levels of service:

1. Self-service. It implies that a person will independently choose goods and their names.
2. Free selection of products. Indicates that the consumer will be offered many goods of the same purpose, among them he will choose those that he likes best.
3. Limited service.
4. Full service (as, for example, in a restaurant).

There are a huge number of retail businesses. These include various shops, catering establishments and others.

Wholesale business from scratch: how to start trading, what you need to know? Today, this question worries a lot of people. The reason is simple: this area can bring considerable income.

Short description

This industry involves the resale of goods from the supplier from whom they are purchased in bulk to buyers (for example, grocery stores), to which goods are transferred in much smaller batches. It is important to understand that we are not talking about selling to the end consumer, but to entrepreneurs.

The key requirements for a successful wholesale business is the lease or purchase of a large premises that will be used as a base warehouse. It is important to choose the right location, as it should be convenient for customers. In addition, this business is demanding in terms of initial investment, since the rent and purchase of goods will cost a round sum.

At the first stages, the key task is to find suppliers and buyers who will sell the goods in the future.

Advantages and disadvantages

1. No need for advertising campaign. Instead, you will need to secure yourself a customer base in advance.
2. When working with large wholesale prices are much higher.
3. The sales area of ​​the goods is as wide as possible.
4. Opportunity to work with large manufacturers who often resort to the services of wholesale companies.
5. Work only with the most profitable positions of goods, including alcohol, tobacco products and semi-finished products.
6. Savings on the purchase of goods.
7. The possibility of receiving payment directly upon delivery, without waiting for the final sale of the batch.
8. Simple rules and tax system. You will only need to pay regular contributions to the simplified tax system or OSN.
9. Absence conflict situations due to discrepancies due to the strict regulations for concluding contracts in this area.

• Frequent requests for deferred payments.
• Experienced buyers will constantly try to bring down the price.
• Frequent and serious debts on the part of buyers.
• Significant customer turnover.
• Requirements from customers on various occasions, as an example, the application of special stickers.
• Huge penalties for breach of contract.

More detailed business plan wholesale company on the example of working with household chemicals can be downloaded from .

Beginning of work

There are two main business options here. The first involves acting as a link between the wholesaler and the retail network that will sell the goods. In the second case, you will have to deal with resellers, significant markups appear, which ultimately negatively affects profits.

At the initial stage, you will need to register a legal entity, rent an office and hire professional managers and accountants. You will also need to hire law firm, which will accompany all transactions. Separately, it is worth noting the need to rent a building for a warehouse in which goods will be stored before sale. In rare cases, it turns out to do without it, which significantly reduces costs.

If you plan to provide services for the delivery of goods, you will need to organize your own structure that will deal with this, or enter into an agreement with one of the transport companies on the market today.

Finding a source of funding

At the initial stages of work, you will need to find a considerable amount that will be used to purchase the first batches of goods. There are three main ideas for a funding source:

1. The bank is not profitable, since credit organizations sometimes finance such projects on the most unfavorable terms for a businessman.
2. State support for small and medium-sized businesses - you should not really hope for this option, since priority is given to financing agriculture, social structures and innovative directions of development.
3. Individuals - this option is one of the most promising, although often investors provide funds, demanding a huge percentage of the proceeds in return.

7 stages of discovery

Opening a wholesale business is carried out in several basic steps. So where to start?

The first of these will require a thorough analysis of the market in order to determine the most liquid categories of goods that can be sold as quickly as possible. Particular attention should be paid to the sale of food products.

At the second stage marketing strategy the niche in which the enterprise will work is determined. The easiest and most affordable option for beginners will be to work with batches of small wholesale. This will allow you to hone your skills so that you can then move on to larger and more cash offers.

At the next stage, the final selection of product groups is made. It is best to work with those goods that you know directly. As a result, you can deal with products in any industry, but this will take a lot of time. After that, you need to find a manufacturer of products that can offer affordable prices.

In parallel, consumers are being sought, to whom the products will be supplied. An important point: you should not work with exclusive goods, as it is difficult to find buyers for them, as well as with perishable products.

The next stage of the discovery model will be the selection warehouse. Not having your own warehouse can result in a lot of problems. Most often, due to the shortage of such real estate on the market, the rent is very high. This is especially true for large rooms in well-located places.

Perhaps the key point in the wholesale business is the search for a supplier. Ideally, it should be in the territorial proximity to the base warehouse. Large producers of the regional level are interested in working with wholesale companies, so it will not be difficult to conclude an agreement. Long-term cooperation is in the interests of all parties. It will allow you to receive various bonuses and discounts in the future.

Recruitment for the marketing department is also important point. Sales Representatives must be qualified to search for points retail. You also need to hire drivers, operators who will process applications, a cashier, a storekeeper and an accountant.

At the last stage, all that remains is the purchase of transport for transportation. The best option- buying your own truck. If this is not possible, you can try to rent it. For large batches, a forklift will be useful.

Methods for increasing profits

The main method of increasing the profit of the enterprise is to increase the clientele and increase sales. To improve these indicators, several basic methods are used. First of all, this is the streamlining of the management system, the conduct of a classic advertising campaign.

The key feature of the latter is a much smaller scale than in the case of other businesses - the clientele is specific, so you can contact it directly.

Video: TOP niches to start in the wholesale business.

Sample business plan

A brief example can be summarized in the following table.

It's no secret that a business built on trade various types goods, is the most successful, especially when it comes to high-demand products, the demand for which never falls. But, unfortunately, most entrepreneurs today have forgotten a little about such a profitable direction as wholesale. The main trump card of this type of activity is that wholesale business you can start from scratch even without financial investments.

Features of activity

The first thing to remember is the definition itself - what exactly we call wholesale. Work in this area is built on the principle that a company or an individual provides its goods in large volumes not to the final consumer, but to another entrepreneur who will already sell them to direct customers.

Another feature of the wholesale is the cost of the purchase. It is, of course, many times lower than the one at which the consumer who came to the store buys the goods. In this case, the margin on the delivered products by the original seller is made in the amount of 10-30 percent of its real value. But in a retail store, the owner can already make a 100-200% markup.

It is important to note that the product in question is not always available from the intermediary. All he needs is to make an offer at a bargain price, find a buyer, then negotiate with the supplier, arrange delivery and get his profit for this kind of service. Hence the conclusion - with a properly organized process, no investments are needed. At the same time, a competent approach will allow you to spend no more than 10 minutes on one such transaction.

Don't forget about your image, though. If you work with a couple of regular verified clients, then most likely you won't even need an office. But when expanding client base it will be necessary to take care of a decent premises and employees. It is unlikely that a serious customer will want to cooperate with an intermediary who does not even have his own office.

What are the benefits

The business process of wholesale trade has a number of advantages over retail. Among them:

• opportunity to earn significantly higher profits;
• no need to deal with various groups of goods, you can focus on only one of them;
• ease of implementation;
• there is no need to look for start-up capital;
• a short preparatory stage.

With all this, you can start working in this direction even with minimal experience in business in general.

Important Points

The organization of the wholesale sales process should begin with a thorough analysis of the market and the place on it of the product that you want to sell. If you are seriously interested in the question of how to open a wholesale business, listen to the following tips:

Things to do

Once again, the importance of choosing a niche that you occupy in the wholesale market should be emphasized. To do this, consider the varieties of forms of organization in this area.

Small wholesale

Usually the entrepreneur acts as a link between the buyer and the manufacturer. It is important here to track all transactions from the very beginning to their completion. The option of dishonest business dealing in this case is 100% excluded, since the chances of losing your customers are very high.

Small wholesale with a specific group of goods

The principle of operation is no different from the previous one, with the exception of a narrow focus of activity. This method doing business will allow you to thoroughly study the market of your products, track the emergence of new manufacturers and competitors. At the same time, these two models allow you to work with another intermediary that has access to the manufacturer, since the latter can set a limit on the volume of purchases, which instantly removes you from the list of his clients.

Medium and large wholesale

In this case, work is carried out directly only with the manufacturer, which allows you to develop your own dealer network. With this model, you simply cannot do without your office and staff, since you will have to work with legal entities, which obliges you to play by the rules of the market.

in the best way choosing a direction will be the study of the manufacturing sector in your area. Any enterprises that produce this or that product need components, raw materials and other materials necessary for production.

So, for example, if in your city there are many companies that install interior and entrance doors, it is quite possible that they would not mind discussing the moment of delivery of small accessories - handles, locks, accessories and decorative elements.

Another example of small wholesale is the supply of spare parts for car repair shops or firms that service household and computer technology. All that is required in this case is to find several manufacturers or suppliers Supplies and details and discuss prices with the consumer.

As a large wholesale, a food group of goods is more suitable, Construction Materials, feed for farms, as well as raw materials for food and processing factories.

The main thing in this area is to be able to navigate and understand how your region lives, what it needs, what goods it lacks. In a word, you need to show your entrepreneurial inclinations, and then success will not keep you waiting.

Wholesale from scratch - how to start a wholesale business: Video

Wholesale sales are sales of goods intended for resale. That is, there are practically no one-time sales and “pushing in” is unacceptable. And most importantly, we need to think not about our sale, not about how much we will ship to the client, but about how much he can sell.

In fact, in order to increase wholesale sales, we must become an expert on the business of our clients, ideally, when the company has its own retail outlets and you can understand how the contact with the end buyer takes place, what are his interests, what are the ways to organize sales.

Laws of wholesale sales department:

1. The focus is on the client's business, not our business. From the moment you start working with wholesale, you need to forget about your sales and think only about customer sales. How to increase them, what product is the most popular, how to increase the profitability of the business. The client will sell, you will sell too.

2. Competent work with dealers and distributors, without interfering with regular customers. It is important to prioritize retail or working with representatives. Sometimes it makes sense to abandon your own retail or significant discounts to support dealers. And sometimes you need to focus on your own sales, if there are certain resources for this.

3. Price policy and discount system should be configured for long-term interaction, and not for one-time transactions.

4. Regular monitoring of competitors' offers through customers who either use competitors' products or have previously used them.

5. Constant search for new customers. The main goal of a retail outlet is to make a profit by increasing sales, so they are often ready to consider new offers. And there is a chance of losing a client, as a competitor will offer better conditions. But it also means that it is more likely to take a customer away from a competitor relatively easily. Therefore, never stop looking for new customers, even if the business turnover is sufficient.

6. Thorough analysis of customer failures. A small client left. Well, no big deal. More time to work with large buyers. Actually very scary. Since the reasons that prompted small customers to leave can play a cruel joke with large ones. The business is arranged in such a way that small customers are more flexible in order to survive, respond faster to changes external environment. As a result, the factors that influenced the small client will soon affect the large ones. Therefore, in order to increase wholesale sales, it is necessary to quickly respond to any loss and not calm down until the reasons for the breakup of relations are absolutely clear.

7. Penetration into the client's business. The better you know the client's business, the less chance of losing it, the closer you are to the end customers, the more effective sales

8. Assessment of the client's potential and setting goals for managers not on the basis of past experience, but on the basis of the share of our sales in deliveries. The manager sells to the customer for 100 thousand rubles, and this turnover is growing, it seems to be good. But the potential of this client is 10 million rubles. You are simply being used as a backup supplier. And the head of the sales department does not know about it. Even worse, if the manager himself does not know about it.

9. Competent work with federal and regional networks. Many suppliers in search of an answer to the question of how to increase wholesale sales are striving to enter the network. Read the article on whether to sign in to the networks and how to sign in to the networks if you decide to do so.

Recruiting for a wholesale department is fundamentally different from recruiting for a regular sales department. Their functions are significantly different, and knowledge of wholesale techniques plays a role.

Selection of managers in the wholesale department:

1. Recruitment of personnel working in the retail of similar products. The person knows the range and business of the end buyer well. Knows a hot commodity and knows how to sell to end customers. With proper training in the basics of wholesale sales, he can be very successful in this direction, as he knows the mindset of the client.

2. Selection from a competing company. The most obvious option, but not always the most effective. Yes, a manager comes with market knowledge, yes, a manager comes with his client base. But is he ready for the fact that your product is significantly different from competitors, is he ready for the fact that he will change his face? And most importantly, if the manager changed a competitor to you, does he merge customers with his acquaintances in the previous company? Will he return to the previous company if the management changes their mind and calls him back? Will he go to the third competitor, taking your base to the previous base? I am not saying that it is not worth hiring such people, sometimes it is very effective, but the personal relationship of the manager to your company is very important.

3. Selection of a manager from related wholesale industries. A good option. He has a client base, he can, without prejudice to your company, send customers to his old company for similar needs, he knows the laws of wholesale sales and the principle of operation of the end buyer.

Whichever option you choose, remember one thing - a sales system is needed in wholesale, retail and any other companies. Sales funnel control, analysis of monthly sales figures by customers, analysis of the number of attracted and reasons for lost customers are the main tools for managing the wholesale sales department.

Good luck in increasing the sales of the wholesale department!

What does a "wholesaler" do, and why should he live?

Usually a wholesaler is a trading or trading and manufacturing company, so I will write in the context of this definition. The most interesting thing is that for a multi-store retailer, the internal distribution center is usually its internal "wholesaler" and its operation is very different from the work of "last mile" stores.

The wholesaler usually has agreements with several large companies - distributors or works directly with the manufacturer. Sometimes - for exclusive sales in a certain territory. The main point is that, unlike a distributor, a wholesaler can provide a wide and interchangeable / complementary assortment from various suppliers. An example is the supply of Chinese equipment to the territory of the Russian Federation. The same company can supply products from both China and Russia, America, Israel, and even do something on its own.

The main process of the wholesaler's work is to collect all this assortment at home, importing the goods, storing them, and working directly with companies that sell the goods further up the chain to the end (consumer). A wholesaler can work with end-users (consumers) himself, but usually they give no more than 20% of the total turnover, and work with them is carried out on a residual basis.

It so happened that the wholesaler occupies the niche of an "intermediary", taking most of the hemorrhoids along the chain of delivery of products to the consumer for himself - which is why he is interesting to all participants. For a manufacturer/distributor, the need to work with 100,500 “last mile” (retail) contacts has been removed: to deal with imports, logistics (transportation and storage) and knocking out money and work with whining every little thing - for them, work is concentrated in one company with several “lapped” clients.

The key plus for the supplier is predictability and stable supply volumes. From the "last mile" horseradish wait - when and what they are ready to buy. This is taking into account the fact that the term for the preparation of goods can be a year and you need to know in advance in what volume to manufacture products (purchase materials, load capacities, etc.) in advance. Also, the nuance is that retail does not have the volumes that are of interest to the plant. Even if the retail is large, the volume of individual orders to the factory is still small - because the factory produces only one type of product. Therefore, the plant is often ready to work with retail, but only with a higher mark-up than with a wholesaler - this is why retail and wholesale prices are separated.

For retail, a wholesaler is access to a wide range of products from several manufacturers, the availability of the required volume of goods at an adequate price, the availability of goods for purchase "here and now", the goods are sold already through customs clearance. Often the wholesaler gives a deferred payment.

It is important to understand that if in offline retail the formula for success is “three Ls” (although this is already less relevant), then wholesale is much more difficult, which I would formulate as “AVLTPL”: Assortment + Volumes + Logistics + Turnover + Planning + Loans.

In fact, all other features of the wholesaler's work follow from these components:

1. Assortment - assortment. The wholesaler works with a wide range of goods from various suppliers. special case“Wholesalers” are vendors, distributors and dealers who can work on a limited range. The difference is that the wholesaler does not have exclusive distribution contracts with the manufacturer, and can itself work as an intermediary between the distributor and the retailer. According to our experience, the assortment matrix of an average wholesaler starts from 5,000 items.

2. Volumes - volumes. The wholesaler works in large volumes and only on large volumes of goods flow. If a wholesaler has no volumes, it is a dead wholesaler. At low retail volumes, it will be easier to work directly with the factory, saving on the intermediary of the wholesaler. Therefore, in this case, the wholesaler, as an intermediary, needs to try hard to justify the purpose of his participation in the supply chain, giving some additional value: logistics, customs, warehouse, assortment, delay. Volume is not only good and pleasant, but it is also a big financial investment, which leads to a lot of other problems.

3. Logistics - delivery closer to the point of consumption, storage of goods for the availability of goods "here and now" for customers, customs clearance. This is often the hell of a wholesaler and the biggest cost point. You need to have (literally and figuratively) customs officers, transport workers, a warehouse closer to the places of purchase (which is very expensive to maintain), personnel who will make it work somehow (and not steal). Moreover, you need to have a warehouse for potentially large volumes with a margin, since the wholesaler must keep a wide range of and have additional safety stock in case of supply interruptions. It is even more interesting if the wholesaler has goods with a pronounced seasonality, when there is not enough space in the high season, and the warehouses are half empty in the low season. Therefore, they try to select the assortment in such a way as to level the seasonality in consumption.

4. Turnover - turnover of goods. If the wholesaler has large volumes and low turnover of goods, the wholesaler needs to have a giant warehouse and endless financial leverage. The faster the product turns around, the faster and more the wholesaler earns (he only works on a fast turnover of goods). The ideal spherical wholesaler from the Chamber of Weights and Measures - the goods are sold directly from the factory, delivering them immediately directly to customers, without storing the goods in a warehouse. Any brakes in the process of turnover of goods are money pulled out of circulation. Because if a wholesaler bought a product and did not sell it, then, firstly, every day he spends resources on its storage (warehouse space, accounting, personnel), and secondly, he took the money out of circulation into a lying product, which, with limited leverage, means he cannot purchase new product for one more turn. Here the problem of illiquid assets arises - when a product withdrawn from circulation remains a dead weight. Given the cost of storing it, it turns out to be easier to give it to someone than to keep it for yourself.

5. Planning - planning. A big problem wholesalers (as well as any participants in economic activity) - limited resources. On a large assortment, with large commodity flows, you can make big profits. But for this you need to have a large financial leverage, which, of course, no one has. Therefore, it is necessary to narrow the field of activity of the company, concentrating on a limited assortment and a certain market share. The choice of assortment is, oddly enough, not only the opportunity to sell it, but also the opportunity to buy it. In contrast to the work of retail, where the greatest hemorrhoids are concentrated in selling to customers, wholesalers have the greatest layer of problems not only in how to sell more, but also in how to ensure current and future sales of goods. The main difficulty is that retail usually wants goods "here and now", but the manufacturer is ready, of course, to give the required volume of goods to the supplier, but only after the conditional "six months (excluding delivery and customs)". Therefore, the wholesaler, buying volumes from the manufacturer, must: firstly, know that he will sell this product in six months and to whom; secondly, to have money to buy the batch from the manufacturer; thirdly, to have a "logistics" to deliver the purchased goods to the retail shipment point. Now imagine this problem in light of the issues and assortment size, volume, and turnover requirement. If online stores now all want to work according to the drop-shipping scheme, without taking on all of the above problems, then the task of the wholesaler is to ensure their work so that retailers can work according to this scheme: so that the right product is available in stock when retail requested it. And retail does not care that this product had to be purchased six months ago and, with grief, it was brought in half and stored in anticipation. And the fact that the goods are ready for transfer to the client within the next few days is only the merit of the good planning of the wholesaler.

6. Loans - loans and deferred payments. This whole scheme does not work if the wholesaler does not have available leverage. Since the moment of purchase of goods and the moment of sale of goods have a large time lag, the company needs a loan in order to have working capital for the purchase of goods. To get it, the company needs to prove that it can sell this product at the scheduled time. In the case of stable operation of the entire supply chain, the credit institution that gives this leverage is often the manufacturer himself, accepting the order without prepayment and shipping with a deferred payment. The same piggy bank includes a feature of work for the supply of retail, when the wholesaler himself (vendor / dealer / distributor) already gives a loan to the buyer and ships it to him with a deferred payment. At this point the question arises financial planning and budgeting - large wholesale companies always have specialists in this field. The fact is that there comes a moment X, when your buyers still owe the wholesaler, but the wholesaler himself must already purchase a new batch (which he will sell in six months) and pay for the previous batches - the so-called. cash gap, and an important part of planning is to prevent such gaps from occurring. Because a partially paid consignment of goods means that in six months the goods will be less than necessary, which means that retail will have less than what is needed, which means that there will be less incoming money for a new batch, and so on further along the cycle. It is important to highlight the highest priority areas for injecting money in order to get out of such a cycle. That is why large companies conduct budgeting and treasury processes - in order to clearly and in advance understand exactly when the ass is planned and how they will try to avoid it or fight it. The planned asshole is part of the competent work of any company, and allows, for example, to apply for factoring / credit in advance, or to cut off the delivery in a delay.

As you can see, in my opinion, the main competence of a wholesaler is not creative marketing and the ability to sell a client, but long-term routine planning of product distribution and budgeting. The work goes purely on the back - the more I drove through myself - the more it settled on the bottom.

The problems of wholesalers stem from their characteristics. These problems are often found in retail companies, but the wholesaler suffers from them more:

1. Unavailability of leverage in one form or another. There is no trust from creditors. Or, more often, the limit of available funds has simply been exhausted - you need to purchase a new batch of goods, and not for anything, because you haven’t paid off the old one yet, or the previous one went into illiquidity, or you bought too much of the previous batch and haven’t sold it all yet (the problem of surplus ).

2. Jittery clients. On the one hand, this is a situation when some middle-class retail client decided to actively invest in marketing, and he SUDDENLY lost sales, which must be provided either to the detriment of other clients (for not planned volumes), or through the intensification of work with suppliers. On the other hand, when regular customer suddenly decided to SUDDENLY curtail the direction of work with one assortment (switch to another or close altogether). He is not very worried that the wholesaler planned and paid for certain volumes of goods for him, and this happened a few months ago. All this is superimposed with the problem that these clients often work through deferred payment, and they stood in the financial plan, which needs to be reviewed both in organizational and in real terms. There are also situations when the client says “There is no money. If you want, take everything that we have not sold to ourselves.” Often, from the side of a small retail client, relatively unskilled suppliers sit (and it is they who will conduct a dialogue with you, as a wholesaler) and order not understand what, and do not understand when, and often SUDDENLY - what spoils key parameter wholesaler's work - predictability.

3. Jerky supplies. The same as described above, only supply disruptions begin. They paid for the goods, but they are not ready, or not all of them are ready (“... take the floor of the container ...”). Or the goods were sent by the supplier, but stuck at customs. Or they introduced the Plato system, and dances and dances began. Or a drunk and sleepy driver killed himself on a pole along with all the cargo. The consequences are often more deplorable than when pulling the client, because. the situation affects a wide range of customers. There are fines for disrupting retail deliveries, or simply losing a contract is possible. Directly affects the planning and budgeting process.

4. Human factor. Errors in working with the assortment, contractors and work planning. If a small company trade in spare parts and ordered the wrong headlight for a Mercedes - this is unpleasant, but not fatal. Worse, when the wholesaler, having incorrectly assessed and predicted demand, the supplier ordered 300 such pieces, and all of them are leftists. Illiquid goods can lie in a warehouse for years, taking up space and blocking working capital, which is blood and air for the wholesaler. In the same way, bad planning leads to bad budgets, which leads to cash gaps and supply and sales problems. An interesting situation in the wholesale trade (especially at the initial stage) when the star salesman leaves the company and opens his own with mahjong and geishas, ​​taking away the client base. Maybe even the whole department. Other problems in working with clients are quite prosaic - it may be incorrect work with customers in such a way that they leave. For the average wholesaler with 10,000 customers, the loss of 1-2 customers, if they are not key, is usually not noticeable in the short term, but in the long term this greatly affects the planning process. And, since the supply process is quite long, then, although the order of goods occurs for one customer base, when the goods arrive at the warehouse, they can actually come under a different customer base and a different demand. These things need to be closely monitored, otherwise sudden problems with the budget cannot be avoided.

5. Inability to grow without structural changes in the company. Unlike retail, where you can grow only by scaling the number of sales and switching to boring CRM. A wholesale company with growth requires significant perturbations in personnel and the tools used. If - for retail, the proportion is that there are 5 sellers for 1 supplier, then for wholesale the situation is completely different: there can be 2 suppliers for 1 active seller. Because what is more important is not the growth of the client mass, which, with stable work, usually proceeds in a passive manner, but adequate routine work with existing clients and meeting their needs. Therefore, for the wholesale, in addition to the built-in sales department, it is necessary to build entire structures for working with the delivery, storage and purchase of goods - all to ensure uniform uninterrupted movement of goods flows with the maximum available speed of passage through the company (turnover). The problem is that if the sales department can work with a large assortment without much difficulty and it is relatively easy to scale, and the average specialists are available and trained, then the supply in this part is enough. difficult process. This is due to the fact that many participants are involved in the supply process (supplier, transport companies, warehouse, sales department, etc.) and many factors are involved (time factor, formation of a sales forecast, availability of goods in the supplier's warehouse, the ability to purchase goods, the availability of warehouse space, the availability of transport, the ability to store goods, the availability of finance for its purchase, economic feasibility his acquisitions, etc.). Those. the process itself is quite complicated, but the qualifications of the people who produce it are rather mediocre, which leaves its mark. Plus, starting at a certain point, throughput the company's business process simply rests on the human factor, and there comes a point when the supply business process does not scale with the growth of staff - the company can hire 5 more suppliers, but it will not get any better. These problems can only be solved through automation and optimization of processes in the company.

A wholesale company, unlike a retail company, does not have the ability to quickly respond to changing market conditions, and therefore it is vital for it to have a clear, at least medium-term, plan. And any action aimed at a sudden change in this plan is a problem for the company. At the same time, any actions aimed at compliance with the plan and its improvement are good for the company.

What set of measures is being taken to solve these problems?

1. An internal financial body is created to form and control the company's budget. At the initial stage, this is done by the head + accountant. Then - a separate person, often also performing the functions of a business analyst.

2. The supply process, divided into three stages: procurement, delivery, storage - is combined under the unified leadership of the "supply manager" and all three departments work in a single information field

3. As key processes, procurement and sales - are combined under a single operational leadership of the general, executive or commercial director - so that these processes work together, and not separately. If there is production, then here.

4. A set of legal measures is being formed. For financial protection companies to be able to effectively work with receivables. For customs clearance of goods. To protect the cargo during transportation. To punish transport workers, in case of failure to meet deadlines. To work with banks in the process of agreeing credit lines. To interact with sales managers and customers so that there is no collusion. To work with suppliers, so as not to choke too much and be responsible for the regularity of deliveries.

5. Communication between departments is being established. Without the correct work of everyone together within the framework of a single field, wholesale sales "on the line" will not be able to work.

6. A scheme is being formed to work more closely with counterparties in order to track their condition (so that there are no SUDDEN throws from side to side), up to monitoring the state of their sales in order to plan their supply.

6.1. There is a scheme of VMI (Vendor Managed Inventory) - when the supplier or buyer has the opportunity to monitor the sales of goods from a third party, and plan their replenishment in advance. If we exclude the paranoia of the client, then this is a win-win situation, because without labor costs on the part of the client, the wholesaler has the opportunity to plan his consumption and the availability of goods on his own, forming a plan of his work.

6.2. There is a scheme of work taking into account the SCN (Supply Chain Network) of the client, when the wholesaler has a client - one legal entity, but has several points of sale, and each point of sale can decentralize the formed supply orders directly to the wholesaler, bypassing the single customer supply center.

6.3. Perhaps, interaction with the client in terms of helping to form a plan for his purchases for the medium term, taking into account logistics. Let's say, instead of buying two containers once for half a year, it's easier for both parties to have the client take out the goods once a month with one gazelle. For example, in our experience, one company was able to cut 3x the money frozen in merchandise while maintaining sales momentum when it moved to an automatic, frequent replenishment process from its supplier instead of ordering once and for a long time.

6.4. The marketing activities of the client are coordinated with the wholesaler in advance so that the wholesaler can prepare the required volume of goods in advance.

6.5. Everything is the same, only for their suppliers, who should also be included in the general information field.

7. A division of clients into cohorts is formed with an individual level of service for each of the clients. More important clients are provided in the first place, less important ones are provided on a residual basis. This is typical if a supply contract is concluded, where the level of availability of goods for the buyer and penalties for its absence are strictly prescribed. Clients are usually divided into cohorts either automatically, according to RFM analysis, or by indirect signs. For wholesale companies where there are several key clients, work with the supply cohort division is one of the key tasks.

8. The level of service and availability of the assortment matrix for customers is planned. The wholesaler can cut off "additional" demand in advance, leaving only the core of goods for the core of customers, supplying everything else on a residual basis. The allocation of the core of sales and ranking is carried out according to the requirements of the wholesaler: the share of sales of goods in the sales of the company, the turnover of goods, the marginality of goods, the level of service available for the goods - the higher these indicators, the greater the availability of goods should be at each point of sale. Previously, for calculation on the knee, ABC-gradification was used for this. But with a large assortment and limited resources, the question arises: “which products from the AAAA group to choose?” Therefore, more tricky ranking schemes are needed.

9. Systems for optimizing transport loading are being introduced. This is not only route planning, but also the prioritization of the weight and size loading of transport and the location of goods.

10. Warehousing systems with address storage are being introduced, allowing you to quickly understand and plan warehouse capacities, as well as optimize the loading and unloading of goods, and optimize the process inside the warehouse. It is done in order to reduce costs, increase the rate of capital turnover and the level of service.

11. Automated systems for real-time analysis of commodity balances are being introduced in order to catch the moment when a product tends to become illiquid and quickly drain it in advance, as well as understanding what is where and in what condition. At the same time, the state of the balances in the future is modeled, taking into account the plan for consumption and purchases. This is done not only from the point of view of a plan-fact analysis, but also in order to plan the need for staff and space in advance, knowing the mass, size and volume indicators.

12. Automated sales forecasting and analysis systems are being introduced in order to be able to build adequate sales plans and, as a result, have an adequate plan to ensure these plans. Systems are also being introduced to control the execution of these plans in order to be able to track and respond to deviations from the plan in a timely manner. Because deviation from the plan today is the lack of money the day after tomorrow, which means potential supply problems.

13. For the purposes of formation and provision financial plan being introduced automated systems budgeting and budget control.

The planning process itself takes place according to the “pyramid” principle, where at the bottom, at the base, are located, according to the Pareto principle, 20% of all the most important customers who consume the most priority goods. Above is a stratum, respectively, of less important customers with less priority goods. And the last stratum is not important sales and customers. Accordingly, in a full time, the company grows up the pyramid. And in the hungry - cuts everything to the very foundation.
All these measures should lead to the fact that the wholesaler will work as a single continuous pipeline - ordering goods from different suppliers, storing them and selling goods to retailers on demand, maximizing the turnover rate of goods and their profits.

Bonus Topic: Why Should Wholesalers Die?

With the growth of automation of work with clients and the simplification of logistics, taking into account the peculiarities of the work of wholesalers, the work of intermediaries will be more and more taken over by the manufacturer himself. The fact is that the manufacturer has a priori already established and debugged the mechanisms of supply and logistics, the manufacturer has access to a wide market and to capital. And this is among other benefits.

And, if earlier the problems of establishing work with retail were not worth the candle, now it is becoming available even for quite large companies. And modern sites a la Alibaba are an example of such a new approach. Over time, apparently, wholesalers will be absorbed by manufacturers in order to obtain a ready-made client base and well-functioning distribution mechanisms. Or die.

Tags:

• b2b
• scm
• supply chain
• forecasting
• business analytics
• business model
• finance

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