May 15 2023
Challenges to running a wholesale business
Running a business-to-business (B2B) enterprise comes with its own set of challenges.
While retail typically focuses on acquiring new clientele, wholesale is more about building strong relationships with recurring customers.
Establishing trust, delivering exceptional customer service, and fostering long-term partnerships can be demanding and time-consuming, but it’s arguably less expensive and stressful than having to constantly drum up new business.
If you are considering opening a wholesale business, you are likely to face at least a few of the below challenges:
- Longer sales cycles: B2B sales cycles are typically longer compared to retail (B2C) sales. The decision-making process in B2B transactions involves more scrutiny, approvals and negotiations. It can require patience and persistence to navigate these extended sales cycles.
- Scalability and growth: Scaling a B2B business can be challenging due to the complexity of customer requirements and the need to align internal processes. Managing growth effectively while maintaining quality and customer satisfaction is crucial. This is where technology can help. A powerful ERP (enterprise resource planning) system can manage and track customer-specific pricing, payment terms and fulfilment processes, among much else. With this in place, you can use Stock2Shop to present this information to your customers in a purpose-built B2B Online Trade Store.
- Pricing and value proposition: Determining the right pricing strategy in a B2B environment can be complex. Balancing profitability, competitive positioning, and perceived value can be a constant challenge. ERPs can accommodate complex discount contracts that can often be customer-specific, or even product-specific. Stock2Shop can accommodate such contract discounts when displaying pricing to each customer.
- Managing cash flow: B2B businesses often face cash flow challenges due to longer payment cycles and delays in receiving payments from clients. Maintaining a healthy cash flow to meet operational expenses, invest in growth, and manage credit terms is essential. Once again, this is where your ERP can protect you by rejecting orders placed by customers that are not in good standing.
- Competitive landscape: B2B markets are usually highly competitive. Staying ahead of competitors, differentiating products or services, and continuously innovating to meet changing market demands require strategic planning and ongoing market analysis.
- Technological integration: B2B businesses need to integrate with various technology platforms and systems used by their clients, such as ERPS or supply chain management tools. Ensuring seamless integration and compatibility can pose technical challenges. With Stock2Shop, you can put your ERP in control of your B2B Trade Store to manage product data and protect against accepting orders from high-risk customers.
- Regulatory and compliance requirements: B2B businesses often operate in highly regulated industries. Navigating complex regulations, compliance requirements, and staying up to date with industry standards can be demanding and time-consuming.
- Talent acquisition and retention: Finding and retaining skilled employees with expertise in B2B sales, account management, and customer service can be a challenge. Building a competent team that understands the intricacies of B2B transactions is crucial for success.
These challenges highlight the importance of strategic planning, effective communication, adaptability and digital adoption to run a successful B2B business.
With 17% of global B2B sales are expected to be generated digitally by the end of 2023, going online is vital to ensure that you don’t lose the competitive edge.
Contact us to ask us how.
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