Inventory management software can take any B2B wholesale business to the next level. You'll have a real-time view into your inventory, be able to identify trends, and connect with suppliers for faster ordering as products counts run down.
To fully utilize inventory management, you also need to ensure your business is firing on all cylinders. This is done through a great marketing plan. As more B2B businesses move to eCommerce, you don't want to get left behind. The last section of this article goes over what's needed to run an effective eCommerce business.
A great marketing plan will help in bringing customers to your website while having an eCommerce enabled business will allow them to buy products online. Behind the scenes, your inventory management system will make sure the right product counts are displayed, inventory is updated as an order is placed, the right people are notified when any item runs low, or a new trend is detected in a potentially sale out.
Efficient management of inventory is key to reducing carrying cost and meeting customer demand. Too much inventory creates overstock, which can cause costs to skyrocket. Some of these costs include product decay, stolen items, items becoming outdated, and consumptions of resources such as warehouse space, electricity, and cooling. Not to mention insurance. At some point, management must take a write off to stop the slow bleed from carrying cost.
On the other end of the spectrum is a wholesaler who tries to manually do JIT (just-in-time) inventory. Instead of stocking just enough inventory to meet customer demand, they quickly find that they are running out of in-demand products and have overstocked on trendy products that have fallen out of trend and seasonal products. Not only has carrying cost increased but now there are a bunch of frustrated customers who have paid for an in-demand product that is backed ordered.
JIT is the right idea but instead of trying to manage it manually, management should use inventory management software. You could make the argument that such software is a requirement for efficient JIT inventory management.
JIT software is not cheap. It's certainly an investment that can take time time to produce positive returns. However, it is worth the investment. The company can more easily scale with JIT inventory management software. Because inventory management software is able to analyze what's selling and what isn't with some additional great insights, a business' inventory can become more dynamic. A dynamic inventory allows the company to stock more seasonal and trendy items without fear that they are stocking during the wrong time of the year or getting a trendy fad right at the tail end.
To fully utilize inventory management software, a business needs enough orders to justify the software's cost and produce enough data for prediction algorithms to complete their task. That's where a good marketing plan comes in.
Getting your name out there and letting your target audience know that you're a B2B wholesaler is only one part of a good marketing plan. Ultimately, all of that effort needs to create solid leads that turn into customers. Keep in mind that a marketing plan is not a one-off strategy. It's something that constantly works in the background to re-enforce your brand and ensure your pipeline remains full. So how do create a marketing plan and execute on it?
The first step in creating a solid marketing plan is to think about what you want the plan to accomplish. If you want to build awareness of your brand and also bring in leads, that's two different strategies. There's nothing wrong with executing two strategies but it will take more work.
For brand awareness, you'll need a customer profile. This profile should include places your customers go to read about your product or industry. Customers might get their information from specific websites, email newsletters, magazines, or trade journals. Once you've identified opportunities, work with a graphic designer on creatives. Creatives are the images that will appear for each branding ad. These ads should include your phone number and website URL.
Generating leads means running ads or targeting specific companies and tracking engagements. Engagement includes clicks from an ad, email opens, email replies, phones calls to specific numbers, or filling in a webform. Tracking engagement lets you know how well a particular campaign is performing. Initial engagements are identified as leads. Once a lead has been identified, the next goal is to convert the lead into a customer. This is usually done with the help of a salesperson.
Taking your wholesale business online provides many advantages. Your business becomes more efficient as it is digitized. These efficiencies are a result of using leverage. Where you use to need team members to complete repetitive work, now eCommerce software does it for you. This is a multiplier effect. Cost of labor drops dramatically because you no longer need employees to handle certain tasks.
eCommerce plugs into many areas of your business - both customer-facing and backend processes. Customers benefit from eCommerce because they are able to shop and pay for items without having to pick up the phone and talk to a salesperson.
Merchants benefit because they don't need as many salespeople to process orders. Some eCommerce systems can also integrate with your accounting system. Such integrations provide even more efficiencies. Rather than getting orders by fax or email from a salesperson, orders are automatically entered into the A/R system. As you have probably already guessed, overhead in A/R is also reduced.
With labor cost decreasing, the business is able to grow its profit margins. Just like an inventory management system, an eCommerce platform can be an expensive upfront investment. However, the platform will more than pay for itself within a short time.
To understand the true impact of going digital, a 2016 report titled 'How B2B digital leaders drive five times more revenue growth than their peers', McKinsey determined that CAGR in digital B2Bs is five times greater than those businesses who have not taken the digital plunge. The synergies created by a digital platform can't be denied. From reduced cost to higher customer satisfaction, digital provides wide-ranging benefits to both merchants and customers.
- Inventory management software can help your B2B wholesale business tremendously
- Understanding effective ways to manage your inventory turnover is key
- Developing a solid marketing plan can help you grow your leads, really make your business more versatile
- Taking your business online can help you reach more customers which in turn grows sales
Topics: inventory management