The distribution business spans many industries. Some firms are brick and mortar while others are solely e-commerce operations. Some do a bit of both. Whatever the format, distributors all have similar challenges. Managing cash flow, hiring and training the best employees, boosting sales and managing inventory tend to be among the usual concerns. However, they don’t have to severely hamper your operations. You can put measures in place to ensure business is as hassle-free as possible.
Here are six tips which will help your distribution business to be more successful:
- Have a Solid Inventory Strategy
Your distribution business is unlikely to be profitable if you don’t manage your inventory properly. Having products in stock when they are needed is critical to being a distributor. You, therefore, need to find a system which works for your business.
Some companies keep limited stock and replenish their supply often. Others try to keep emergency stock in case demand spikes while some have a just-in-time strategy. Your decision will depend heavily on the type of products you sell.
Before you decide on a strategy, track your incoming and outgoing stock, count the products in the warehouse and on the shelves, and monitor when demand tends to spike. Use this research to guide the development of your strategy. You don’t want to have to turn away potential customers.
- Master Customer Service
It can be tempting to try to compete on price alone, but that’s rarely a solid strategy. Customers do business with companies that make them feel valued. They don’t only want a product. They want quick answers to queries, friendly interactions and satisfactory resolutions to problems.
Make sure you provide opportunities for them to ask questions and give feedback. Live chat has proven to be an excellent way to improve customer experience. The more you listen to your customer, the more likely it is that you will be able to satisfy them.
- Stay in Control of Cash Flow
Without cash flow, your distribution business will fold. You may want to offer buyers flexible payment terms, but you shouldn’t go overboard with credit. Make sure you put a system in place to collect the money you’re owed. Accept credit cards and offer online payment solutions to give buyers some convenient options.
Don’t be afraid to outsource debt collection if you need to. Going forward, consider asking buyers to make a deposit before you deliver large orders. Keep track of your accounts payable and receivable so you always know where you stand. Businesses need cash to survive.
- Bring Your Procurement into the Modern Era
E-procurement through a system like PunchOut Catalogs can create a smoother process for both you and your buyers. This system is straightforward, but it’s also sophisticated. You can sell your core products and cross-sell or upsell to increase revenue.
E-procurement also enables you to collect information on customers’ browsing practices and search patterns. Some large companies only purchase from distributors who use PunchOut so you can use this to bolster your marketing efforts. Let that be the differential that sets you apart.
- Hire the Best Sales Team and Give Them the Tools They Need
Your employees can make or break your business. Don’t rush the hiring process. Know exactly what you’re looking for and take the time to properly interview applicants. Don’t just look at qualifications. Ask interviewees to share examples of their problem-solving ability or how they would deal with difficult customers.
If a potential employee doesn’t have all the skills you need but they have a can-do attitude, consider whether you would be willing to train them. Once you’ve hired a team, make sure they have all the information they need about your business. They can’t sell your products if they don’t know how they work or how much they cost.
- Build Relationships with Buyers
Your success will depend on whether you build strong relationships with your customers. Meet them where they are. You can visit their offices or stores, but you also need to engage with them online. Get an email marketing campaign going or post thought-provoking content on Instagram regularly. You can even produce short how-to videos showing customers different ways in which your product can be used.
Managing a distribution business is hard work. However, it doesn’t have to be impossible. If you hire the right team, train them and give them the tools to work with, you’ll be well on your way. Focus on building relationships with customers, strengthening your procurement practices and managing cash flow and inventory. Follow these tips and watch your business improve.
Featured Image Credit: Pixabay
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