Knowing those systems and how they can best serve your business is crucial to maximizing profits and staying ahead of the game. 

In this ultimate guide, we’ll go over everything you need to know about:

• How wholesale distribution systems work.
• How to use software to optimize your distribution system. 

What are wholesale distribution systems?

Wholesale distribution systems are the different methods, vendors, and networks that a wholesaler uses to get its product to a customer.

The purpose of wholesale distribution systems is to facilitate the marketing, transportation, and delivery of goods or products to the end consumer. 

Types of wholesale distribution systems

Wholesale systems of distribution can be classified in a few different ways, including:

• Business-to-business (B2B): In a B2B wholesale system, the wholesaler sells to retailers that then resell to customers.
• Direct-to-consumer (D2C): In a D2C system, the wholesaler sells its products directly to the consumer.
• E-distribution: In this system, products are available for purchase directly from the wholesaler via an online platform.

What is a distribution channel?

A distribution channel is part of downstream operations, the chain of businesses a product goes through from production to end consumer.

Traditional distribution channels encompass manufacturers, wholesalers, retailers, and consumers.

Modern channels of distribution that are increasingly common nowadays include e-commerce and drop-ship distribution.

Types of distribution channels

In the distribution of a product, there are three main channels: direct, indirect, and hybrid.

All channels involve one or more distribution system participants or intermediaries. Those intermediaries are manufacturers, wholesalers, retailers, and end consumers. 

Let’s look at the three main distribution channels and examples of how businesses use them.

Direct channels

In direct channels, the producer sells directly to the customer without using other distribution system participants.

A product that goes through a direct channel takes the shortest route to the consumer. For example, a manufacturer that makes industrial machinery sells them directly to the customer.

Another example is the automobile industry – car manufacturers that sell their cars to customers through their stores use a direct channel. 

Indirect channels

Indirect channels use one or more intermediaries to get a product to the end consumer.

Most consumer products use indirect distribution channels comprising manufacturers, wholesalers, and retailers. 

The healthcare industry typically uses indirect distribution channels for pharmaceutical distribution.

For example, a pharmaceutical company may get its product to the customer via the wholesale market, selling its products to a wholesale company in bulk.

Then, the wholesaler finds retailers and sells the product to them for resale. Finally, the retailer, such as a pharmacy, sells the product to end consumers.

Hybrid channels

Hybrid distribution channels use direct and indirect channels to get products to the end consumer.

A company that sells directly to customers and other businesses or retailers uses hybrid distribution channels.

For example, a manufacturer producing clothing might sell directly to customers through their website. At the same time, the manufacturer may sell to wholesalers that resell the clothes at wholesale prices to retailers.

What is the difference between direct and indirect distribution channels?

The difference between direct and indirect distribution channels is how the product reaches the customer.

A manufacturer that sells directly to the consumer uses direct channels. In contrast, indirect channels use intermediaries to get the product to the end consumer. 

One example of a direct channel is a brewery that makes craft beer on-site and sells it directly to the customer.

An example of indirect distribution is the wine and adult beverages industry.

Due to laws still in place from the Prohibition Era, manufacturers in this industry aren’t allowed to sell alcoholic beverages directly to customers. Instead, they must sell to wholesalers.

The retailers then purchase alcoholic beverages at wholesale prices and resell them to customers.

Choosing the right distribution channel

The right distribution channel for companies largely depends on the industry the company operates in and what products it sells.

A company should determine the most profitable and efficient ways to get its products to end consumers.

Let’s look at some distribution sectors or channels and which companies benefit from using them.

Producer > consumer

In this type of system, the most prevalent distribution methods are:

• On-site sales counter. 
• Door-to-door sales.
• Mechanical device sales (i.e., vending machines).

Producer to consumer is most suitable for:

• Perishable goods in (i.e., catering).
• Products sold by mail.
• Industrial goods that require manual intervention.

Producer > retailer > consumer

In this type of system, the main distribution methods are:

• Postal orders.
• Sales directly from the factory.
• A retailer purchasing directly from the producer.

Producer to retailer to consumer is best suited for:

• Perishable products (e.g., food and fashion products).
• Large retailers dealing directly with producers.

Producer > wholesaler > retailer > consumer

In this system, the main distribution method is via wholesalers and retailers.

It’s best suited for:

• Products needing proportional distribution.
• Goods sold in widely scattered areas.
• Large quantities of produced goods purchased in limited amounts.

The essential features of a wholesale distribution system

Distribution software has critical features that help wholesale distributors with a wide range of operations, such as customer relationship management (CRM) and sales fulfillment.

Some essential features of a wholesale distribution system include: 

• Purchase optimization. 
• Logistics management. 
• Order fulfillment.
• Inventory management and tracking.

Why implement a wholesale distribution system?

Implementing a wholesale distribution system is vital for companies wanting to get ahead of the wholesale market.

Distribution software acts as an automatic product distribution system in that it automates many of the tedious processes involved in wholesale distribution, including:

• Invoicing.
• Procurement.
• Stock tracking.

According to Forbes, wholesale distributors must adopt innovative software solutions to compete in an ever-shifting economy.

A wholesaler that uses distribution management systems or software will be more resilient and better equipped for the future.

What are the benefits of wholesale distribution systems?

The benefits of wholesale distribution systems include increased visibility, optimized inventory management, and improved operations:

• Increased visibility: Distribution software increases visibility through a centralized platform that keeps track of operations and workflows. This platform lets you view operations in real-time, including stock levels, task assignments, order fulfillment status, etc. 
• Optimized inventory management: Wholesale distribution software provides access to automated inventory tools for inventory management. This includes paperless transactions and detailed inventory tracking over multiple locations.
• Improved operations: Wholesalers using distribution software can keep track of procurement, picking and packing, dispatching, shipping, and other essential processes. 

Who should use a wholesale distribution system?

Wholesale distribution software is most helpful to wholesalers who want to simplify their distribution service with a software solution.

Other companies that want to stay competitive through digitizing distribution processes can also resort to wholesale distribution systems. 

Wholesale distributors have to keep track of multiple systems simultaneously, including:

• Sourcing products from manufacturers.
• Optimizing delivery.
• Managing supply chains.
• Staying on top of customer relationships. 

Wholesale distributors often use multiple platforms for managing parts of a central distribution system and manual documentation, such as spreadsheets. But this can increase operational costs, compliance costs, and time spent working the separate systems.

In the worst case, errors made in one system might affect other systems, causing severe congestion in supply or delivery. 

Wholesale distributors can avoid these additional costs and problems with a software solution, which makes it easy to manage all the moving parts of the business on a single distribution system platform. 

How do I get started with wholesale distribution systems?

You can start with wholesale distribution systems by first examining which distribution system is a good fit for your business and industry, whether B2B, D2C, e-commerce, or other systems.

Then, find the software solution that’s the best fit. 

Distribution software that offers an all-in-one software solution is the simplest, quickest way to solve the challenges that distributors face.

An all-in-one software provides everything you need to manage operations, including inventory, workflow, and customer relationship management.

One of the best options for an all-in-one software solution is Method CRM, a fully customizable platform with everything a wholesale distributor needs to:

• Close more sales.
• Enhance customer relationships.
• Simplify distribution workflows.

Method’s platform offers many essential features for wholesale distributors, such as advanced inventory management, workflow automation, and a two-way sync with the accounting platform QuickBooks. 

How to set up a wholesale distribution system

To set up a wholesale distribution system, you must:

1. Determine who your customers are and how you’ll get your product to them. Ask why and where they’ll buy your product. 
2. Choose which distribution channels are best for your business. Are you selling directly to your customers? Or will your product go through intermediaries that are purchasing for resale? 
3. Find and establish business relationships with the intermediaries you need, and sign agreements with them. 
4. Even after the system is set up, monitoring and optimizing your distribution network is essential.

Always look for ways to make it more efficient and re-examine if it’s the best way to get your products to your customers. 

Key takeaways

Wholesale distribution systems, whether B2B or D2C, help wholesalers define the customers they’re selling to, while distribution channels are the intermediaries involved in the distribution of the product.

Choosing efficient systems and channels of distribution is essential because it’s the core of how your products will reach your customers. 

While many wholesalers use different software to manage operations, implementing an all-in-one software solution is the best way to maximize profits and remain competitive.

The best all-in-one solution needs to handle critical operations for wholesalers, such as:

• Inventory tracking and management.
• Logistics management.

Method CRM is a top-performing CRM platform that can handle all that (and more). Method offers a fully-customizable platform you can tailor to your business’s unique needs.

Get top-rated features like advanced inventory management and QuickBooks or Xero sync in a single centralized solution. 

Wholesale distribution systems FAQs

What is an example of wholesale distribution?

An example of wholesale distribution is when a wholesaler buys products from a manufacturer in bulk and sells them to retailers or consumers at wholesale prices. 

What is a wholesale management system?

A wholesale management system is a tool wholesalers use to manage and optimize distribution workflows and processes.

What is distribution management system software?

Distribution management software is a program or platform that assists distributors in getting products to customers efficiently. Distribution software typically includes features like sales order management, supply chain management, transportation and warehouse management, and CRM.

Claim your free trial of Method CRM now!

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With all the options available, you probably struggle to choose the right wholesaling CRM system. If so, this blog post has you covered!

Here, you’ll learn about the best options on the market and what makes them stand out. 

You’ll also get a glimpse into the pros and cons of each wholesaling CRM system.

What is a CRM system for wholesale distributors?

But first, what exactly is it? Let’s break it down!

A CRM system for wholesale distributors creates a central spot for sales, marketing, and customer interactions.

A CRM system allows you to:

• Track customer data.
• Manage sales pipelines.
• Create quotes and invoices.
• Monitor stock levels.

Benefits of CRM systems for wholesale distributors

There are many advantages to using a CRM system for wholesale distributors. Here are some of the top benefits:

• Manage your customers better.
• Make tracking inventory simple.
• Segment and target customers using automation. 
• Automate repetitive tasks such as follow-up emails. 
• Achieve more profitability through repeat customers.

What are the components of an ideal CRM system for wholesale distributors?

An ideal CRM system for wholesale distributors should include: 

• A two-way QuickBooks or Xero sync to connect your accounting data.
• Cloud capabilities to support remote work and give real-time updates.
• Seamless integrations with other tools you use.

How we chose the best CRM systems for wholesale distributors

Below is a list of the best CRM systems for wholesale distributors. Each has unique features that improve your business.

We chose the best lead management software for wholesale distributors based on their:

• Features.
• Pros and cons. 
• Price.

The 9 best CRM systems for wholesale distributors

Here are the best CRM systems for Wholesale Distributors:

1. Method CRM

Method CRM is the perfect software for wholesale distributors that run their business on QuickBooks or Xero. 

It includes a real-time two-way sync with your accounting software, plus an automated CRM system workflow that’s ideal for wholesale distributors. Its powerful features make it one of the best CRM systems for small businesses.

Key features

• Automated lead collection with web-to-lead forms. 
• Drag-and-drop workflow automation. 
• Instantly sync estimates, invoices, and payments to QuickBooks or Xero. 
• Online portals to serve your customers at any time.
• 360-degree view of each customer, including history and interactions.

Pros

• Powerful, two-way QuickBooks and Xero integrations.
• Unlimited customization.
• Reusable email, report, and transaction templates.
• Convert estimates into invoices in a few clicks.
• Several third-party integrations, such as Gmail, Zapier, and Outlook.

Cons

• Only available in English. 
• Limited to QuickBooks and Xero users. 

Pricing

Method CRM offers the following pricing plans:

• Contact Management: $25 per user per month.
• CRM Pro: $44 per user per month.
• CRM Enterprise: $74 per user per month.

Method CRM offers a free trial with no credit card required. Get started today!

2. NetSuite CRM

Image credit: NetSuite

Netsuite CRM gives you a single view of your prospects, customers, partners, and vendors to deliver the best customer experience.

Key features

• Cash flow management.
• Monitor expenses and assign expenses for specific projects.
• Comprehensive dashboard with GANTT charts, tasks, and KPIs.

Pros

• Open API for integrations with other software systems.
• Offers dashboards specific to each employee.
• Estimates turn into invoices with one click.

Cons

• Weak integration with Outlook.
• Sending invoices one at a time is tedious. 

Pricing

Netsuite CRM does not provide its pricing information on its website, but you can reach out to them for more details.

3. Genoo

Image credit: SoftwareAdvice

Genoo is a robust wholesaling CRM system with features that make it ideal for small and medium-sized businesses.  

Key features

• Marketing automation software includes responsive templates. 
• Track and score your leads’ interests. 
• Build customized website forms with one click.

Pros

• Training includes an email marketing module.  
• Genoo plugin for WordPress at no additional cost.
• Great customer support.

Cons

• The automated campaign builder is too complex.
• It could be more user-friendly.

Pricing

Genoo offers pricing options based on paying per email or lead. 

Pay per email:

• Standard: $199 for up to 3 users per month.
• Premium: $599 for up to 10 users per month.
• Elite: $1495 for up to 50 users per month.

Pay per lead:

• Standard: $274 for up to 3 users per month.
• Premium: $839 for up to 10 users per month. 
• Elite: $1995 for up to 50 users per month.

4. SysAid

Image credit: CompareCamp

Your CRM system workflow is simple with SysAid and its powerful service automation features.

Key features

• Ticket automation to sort and route each ticket to the right person.
• One-click to automate repetitive, error-prone tasks.

Pros

• User-friendly.
• Easy to install and configure.
• Great support from SysAid customer service. 
• Solid array of IT management tools.

Cons

• Minimal customization ability for emails. 
• Limited support features for the desktop version.
• Slow performance for the cloud version of SysAid.

Pricing

SysAid does not provide its pricing information on its website, but you can reach out to them for more details.

5. Oracle CRM on demand

Image credit: Oracle

Oracle CRM On Demand provides a compelling CRM solution for customers and partners. 

Key features

• AI intelligent bots for better customer experience.
• Create custom objects, fields, calculations, and views. 
• Edit multiple records at a time from a list.
• Group calendar displays Account, Contact Phone, and Activity Status information. 

Pros

• View and interact with businesses in multiple languages.
• Intuitive software. 
• Integration with optional call center. 

Cons

• The number of capabilities overwhelms users. 
• No follow-ups on crash reports. 

Pricing

The pricing information is unavailable on their website, but you can contact them for more details.

6. Keap

Image credit: Keap

Keap’s powerful sales and marketing automation is ideal for small businesses that need software with customer segmentation features. 

Key features

• Automatic contact updates.
• Email and other marketing actions triggered by client action.
• Create tags to segment contact types.

Pros

• Comprehensive training on the system. 
• Automated long-term nurture. 
• Reliable customer support including live chat. 

Cons

• Steep learning curve.
• You will lose your information or work if you do not save it.
• Limitations with search tool.
• Firefox does not support Keap’s Campaign Builder.

Pricing

This CRM system for wholesale distributors has 3 pricing options: 

• Pro: $169 for 2 users per month (with an additional $29 per user)
• Max: $249 for 3 users per month (with an additional $29 per user)
• Max Classic: contact them.

7. NICE CXone

Image credit: G2

Nice CXone is a leader in cloud customer experience. Below are the powerful functions that make it stand out as a CRM system for wholesale distributors.

Key features

• Automated self-service for customers.
• AI for hyper-personalized routing.
• Behavioral understanding for real-time agent guidance. 

Pros

• High level of customization for profiles. 
• User friendly. 
• Integration is simple. 

Cons

• Dashboards can get cluttered when accessed by too many users. 
• Analytics are challenging to use and need more accuracy. 
• Poor customer support. 

Pricing

The pricing information is unavailable on their website, but you can contact them to find out more.

8. ServicePRO

Image credit: Service Pro

ServicePRO automates your service desk and organizes your workflows with the impressive features listed below.

Key features

• Project templates to manage multi-task activities. 
• The automated service desk includes request escalations.
• AI-based virtual assistant on webpages and service portals. 

Pros

• Intuitive interface. 
• Great implementation support. 
• Integrates with software such as QuickBooks and Netsuite. 

Cons

• Frequent problems require data or program fixes. 
• The mobile application is slow.  

Pricing

The pricing information is unavailable on their website, but you can contact them for more details.

9. SAP Customer Experience

Image credit: SAP Blogs

SAP Customer Experience combines customer relationship and experience (CX) management into one tool with its powerful features.

Key features

• Build customer profiles to understand your data. 
• AI fuelled insights to build customer loyalty. 
• End-to-end business models to get a clear view of inventory, supply, and customer engagements.

Pros

• Easy to use. 
• Good customer support.
• The product extends into major industries. 

Cons

• Training and maintenance cost is high. 
• Finding out what causes errors is difficult.

Pricing

Pricing information for this wholesaling CRM system is unavailable online, but you can contact them for more details.

Which CRM systems for wholesale distributors should you use?

With the number of CRM systems for wholesale distributors available, choosing the best CRM system can seem daunting. 

There is no one-size-fits-all approach, but you’ll definitely want to consider cost, features, and your business needs.

Additionally, you need CRM capabilities specific to wholesale, including:

• Strong customer management capabilities.
• A cloud-based CRM.
• Instant QuickBooks or Xero sync.
• Integrations with the tools you use.

Method CRM is a popular choice for many reasons. It offers robust CRM functionality that makes it ideal for wholesale distributors that need more than a CRM but less than an ERP. 

The real-time sync with QuickBooks and Xero combines your accounting data with customer information to transform your customer experience and operations. 

Instead of cluttering your accounting data in QuickBooks or Xero with leads, you manage them in Method CRM. Then, your leads sync to your accounting software when they become customers. 

Next, Method CRM turns estimates into invoices in just a few clicks. 

Begin your free trial of Method CRM to get started with the top CRM system for wholesale distributors.

Key takeaways

A CRM system for wholesale distributors transforms your sales, marketing, and customer operations. 

A wholesaling CRM system like Method CRM enhances your process with capabilities such as:

• A no-code backend to automate any workflow you need. 
• Powerful CRM system workflow automation. 
• Two-way, real-time sync with QuickBooks and Xero.

CRM system for wholesale distributors FAQs

How much does a CRM license cost?

Costs vary widely, depending on the CRM system and features that come with it. For example, many CRMs offer a free version of the software but it is usually limited in features and users. 

However, most wholesaling CRM systems will cost you around $25 – $75 per month per user. 

CRM licenses typically cover the cost of software, setup and training. 

What are the 3 key types of CRM systems?

When it comes to CRM systems for wholesale distributors, there are three main types:

• CRM workflow.
• Marketing CRM.
• Sales CRM.

Each type of CRM system serves a different purpose to manage your wholesaling operations more effectively. 

What is the most commonly used CRM?

Method CRM is a popular CRM system for small businesses as it offers unmatched capabilities. 

Its powerful two-way sync with QuickBooks and Xero allows you to have your accounting data at your fingertips, without the risk of double-data entry.

With its no-code backend, you’ll automate any workflow you need. What’s more, the 360-degree view of customers and suppliers transforms your customer experience and operations.

Get the best CRM for wholesale distributors with a free trial of Method CRM.

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In many ways, this disruption in the industry is understandable. As a wholesale distributor, you are feeling the stress from all sides. Wholesalers and distributors are a central link between the economy and the supply chain, working behind the scenes to supply and deliver goods to customers around the world.

Wholesale distributors are working within the supply chains of manufacturers with automated systems, as well as alongside large retailers like Amazon and Wal-Mart with their sophisticated logistical systems. Anyone can see how being in the middle of that can be stressful!

However, wholesale distributors need not worry. There are tools and tactics you can use to stay innovative and keep up with the pack. 

In fact, many experts are identifying some key innovative practices that are keeping the wholesale distribution industry healthy and competitive.

Today we will talk about how the wholesale distribution sector works, and look at the trends and innovations that are currently changing the industry.

Let’s start off by discussing each component of the wholesale distribution industry.

Wholesaling industry 101

Simply put, a wholesaler fulfills orders from retailers by reselling goods in large quantities for manufacturers.

A wholesaler sells their products in bulk to retailers, which allows the retailer to purchase at a lower price than if they were to buy single items or smaller quantities.

Wholesalers buy goods from either the manufacturer or a reseller, and in return get a large discount for the items. Wholesalers are rarely involved with the manufacturing process. Instead, they focus on the distribution. 

What is the distribution industry?

A distributor works closely with a manufacturer to sell more goods. The distributor is the middleman between the producer of the product and the retailer. Distributors can buy from manufacturers and sell to retailers, or, less commonly, they can sell directly to the consumer or business. 

Distributors provide many benefits to manufacturers, like decreasing inventory and service costs. They provide inventory management and process optimization strategies to create a total solution for their customers. 

Distributors often represent multiple products or companies, and can therefore bundle them together. This results in a streamlined buying process and a decrease in costs for retailers who need products from multiple companies. 

What is the difference between a wholesaler and a distributor?

At this point, it may seem difficult to differentiate between distributors and wholesalers. A distributor does perform some of the same functions as a wholesaler, but they have a more active role in the process. 

However, unlike distributors, wholesalers are not responsible for having the product sold to the customer and are not concerned with whether the retailer sells the product at all. 

Despite the small differences, wholesalers and distributors currently face similar challenges when it comes to maintaining their role in the supply chain. 

In fact, many companies operate as both wholesalers and distributors. When you combine these two components of the supply chain, you have the wholesale distribution industry. 

How to increase sales in wholesale distribution

The wholesale distribution industry is a key link between manufacturers and retailers, and therefore plays an important role in increasing the sales of a product. 

According to Deloitte, there are a few key ways for wholesalers, distributors, and retailers to fight the growing challenges facing the industry today. 

• Invest in technology that supports delivery: wholesale distributors need to keep up with the newest trends, which means adopting flexible, connected technologies that help drive an effective delivery system.
• Build processes that streamline data-driven decision-making: you want to drive processes that allow you to draw insights from data collected from your delivery systems. 
• Develop people capabilities to support strategic delivery sourcing: data-driven insights mean nothing if you don’t have anyone to implement what this data means. Bring on people who understand and can act on the collected data. 

Now that you have an idea of what you need to increase sales, let’s take a look at the current trends in the wholesale distribution industry.

Top wholesale distribution trends and how technology is impacting the industry

As with many industries, wholesale distribution is moving fast. Thanks to technology, trends in this industry evolve quickly, and it could be difficult to keep up with what’s new.

If you’re struggling to figure out how to keep your business up-to-date, we’ve got you covered. We’ve put together some of the top trends in the wholesale distribution industry to help you keep up and implement changes in your business.

1. Process automation

Some parts of the distribution industry are lagging behind the workflow automation curve. 

When it comes to record-keeping, for example, industries from medicine to e-commerce are moving ahead quickly with digital solutions. 

Yet many people in the distribution industry are still working in an era where all shipping requires a paper trail. It’s an antiquated system that costs valuable time and efficiency.

The good news is that wholesalers and distributors are already embracing technology when it comes to inventory control. Individual items are tagged in the warehouse and wireless technologies are used to track their movements. These systems leverage the power of:

• Radio Frequency Identification (RFID) and GPS Internet of Things Mobile technologies.
• The Internet of Things (IoT).
• Mobile technologies for inventory, shipping, and receiving.

With computers keeping track of the basic movements of supplies, executives now have more time to examine analytics and insights to make better business decisions for their companies and for the stakeholders who depend on them.

As the costs of digitization decrease, distribution companies can take advantage of many of the same technologies that are used in other industries.

2. B2B customers expect B2C-level personalization and responsiveness

In a digital environment, it’s easy to imagine customers as nothing but data in your database. Don’t get caught in that trap. Remember: your customers are people.

Retail marketplace Amazon and media content provider Netflix have changed customers’ expectations for business-to-consumer (B2C) interactions. Those B2C expectations have transferred into the B2B (business-to-business) realm as people want what other industries give them more personalization and responsiveness in service, along with superior product presentation and delivery.

Fortunately, e-commerce has made this level of customer service possible. In fact, the B2B e-commerce market is expected to reach the US $20.9 trillion by 2027.

The following developments in wholesale distribution show how the demands of the industry are changing:

• Product presentation: An increase in digital databases means that businesses are now asking for resources such as high-quality product images in 3D, or better search options to find what they desire.
• More channels: Customers are also asking for more consistency across channels and platforms. For example, it’s now easy to track how many customers are using iPads to use an e-commerce site. Companies should monitor these trends and make the necessary changes on their sites to better serve those customers’ needs.
• Immediate feedback: Just like B2C customers use Yelp or TripAdvisor to give feedback on their customer experiences, a handful of leading distributors are surveying customers about their willingness to recommend them to peers. Wholesale distributors are also leveraging social platforms such as Twitter, YouTube, Instagram, and Facebook to connect with customers and influencers.

3. The effects of global dynamics on the supply chain

Wholesale distributors play a vital role in the supply chain. However, the Covid-19 pandemic demonstrated how quickly that role could change. 

During the pandemic, many distributors ended up in one of two positions: either their demand spiked to a point where they couldn’t keep up, or it drastically fell. 

This change forced distributors to ask themselves important questions, such as “how am I going to manage my current inventory?” or “how do I find new channels to sell it?”

This situation has created an emphasis on the need to anticipate future supply chain disruptions differently. The focus is now on demand, inventory, and supply planning processes.

According to  McKinsey, organizations can maintain their position in the supply chain by:

• Creating transparency.
• Estimating available inventory
• Assessing realistic demands. 
• Managing working capital.

4. Increased competitiveness due to expanding markets

The wholesale distribution sector is also facing serious competition as large retailers look for ways to expand their markets and innovate.

For instance, Ace Hardware is now targeting commercial property owners, while Home Depot now has a line of products for the building sector. Their name brands already carry weight in the distribution industry, despite only entering these markets in the last five years. 

Traditional distributors must respond by reducing margins in segments such as building supplies and lighting, as well as investing time into additional innovation distribution.

This increased competition is paving the way for new business models, challenging wholesale distributors to find new revenue sources through project management and value-added services. 

What does this all mean for wholesale distributors?

The wholesale distribution industry is rapidly evolving and we’re excited to see the innovation of distribution and manufacturing companies in the coming years.

For now, working in supply chains with innovative manufacturers and retailers means that wholesale distributors must elevate their game to stay competitive. This means doing things faster, with better systems for collaboration and integration, and with greater attention to customers’ needs.

Luckily, Method CRM has got you covered. With its real-time QuickBooks sync, easy-to-use lead and customer management features, and integrations with popular apps, Method is the perfect tool to help wholesalers and distributors keep up with the changes around them.

Start your free trial and see how Method can help your business thrive!

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While every sector is undergoing significant changes in the way they do business, it’s hard to imagine an area that will be as fundamentally transformed as the logistics industry.

The logistics industry — which includes manufacturing, wholesale, distribution, and transportation companies — is on the cusp of some revolutionary changes in how products make it to market. Here are the three logistic trends that may have the biggest impact.

Logistics trends to watch out for

Drones

In the last decade, Unmanned Aerial Vehicles (UAVs) have gained popularity as consumer devices and have been tested for their potential commercial applications, most famously by Amazon’s Jeff Bezos.

Overall, drones remain a niche technology. But that’s all poised to change when the logistics industry gets into the action en masse.

Drones have the potential to reduce labor costs while making inventory management and distribution more efficient than ever. In a fascinating research report by PwC, they predict delivery drones may become commonplace sooner than we think. In the UK, they predict there will be over 76,000 in the skies by 2030. Of that number, nearly 15 percent are expected to be for logistics purposes. The report also predicts that drones will be one of the top logistics trends as they become ubiquitous in warehouses. The uses of drones will range from helping to scan in-house inventory to being dispatched as delivery vehicles.

The impact of drones may go well beyond last mile delivery of small packages. A Spanish company has already developed a UAV that can carry nearly 2000 kilograms of freight and even land on water. This may eventually open new opportunities further up the supply management chain.

3D printing

3D printing has been hailed as potentially the single biggest disruptive phenomenon to impact global industry since the introduction of assembly lines.  

The hype mainly revolves around the technology’s potential to decentralize the means of production on a mass scale. In theory, one day consumers may no longer need to go to a hardware store for drill bits or a clothing store for a new pair of paints. All they would need to do is purchase the digital design and raw materials to print out the product at home. This would massively disrupt the supply chain, as companies would no longer rely on cheap overseas production. Instead, the logistics industry’s focus would shift toward raw materials.

However, in the nearer term we are more likely to see the impact of 3D printing in warehouses. A recent Forbes article gives the example of an automotive parts warehouse, which has to be stocked in great quantities to meet the wide variety of demands across different makes and models. A lot of that inventory sits idle, taking up shelf space for if and when a particular order arises. Alternatively, the warehouse don’t stock a certain part at all and the consumer loses by having to purchase it from a more remote location.

3D printing could effectively eliminate that problem by moving warehouses from traditional static inventory toward digital inventory, where shelves of spare parts are replaced by digital design files that can be printed on demand.

Physical Internet

The next big thing in logistics trends is called the Physical Internet (PI). This is an idea that aims to take the principles that make the Internet so efficient and apply them to the physical world of logistics. The concept is the brainchild of Professor Benoit Montreuil of the Georgia Technology Institute, who first proposed it in 2011.  

Think of it like this: When you send a digital photo, the picture gets broken down into smaller information packets, like a whole puzzle being broken. To avoid traffic jams, the different puzzle pieces flow through different routes and are processed at various hubs to reach the receiver’s screen as quickly as possible, where they are then reassembled into a whole picture.

The goal of PI is to apply that same logic to physical objects. For example, it’s estimated that about 20 percent of transport trucks on the road are empty at any given time as they go to their next location to fill their freight again. Many more are partially empty. PI aims to move freight toward 100 percent capacity at all times by building an open, interconnected network with the aid of standardized “smart” containers and cross-docking hubs shared by numerous companies.

There are already signs of this idea taking hold, most notably in the European Union, which through the Alliance for Logistics Innovation through Collaboration (ALICE) has a strategy to implement a bona fide Physical Internet network by 2050.

Barriers exist for these logistics trends, but the potential is enormous

There are multiple barriers to overcome before these logistics trends can truly take hold. For instance:

• Regulations regarding drones are complicated and still very much a work in progress.
• 3D printing presents serious challenges related to intellectual property protection.
• The Physical Internet will require unprecedented collaboration amongst governments and the logistics sector to agree on standards and protocols.

However, these problems will eventually be solved, which means the routes your products take will start to look a lot different than they do today. With this in mind, now is the time to stay informed. By embracing these new technologies as they emerge, you’ll set your company up to stay competitive and deliver on changing customer expectations.

To boost efficiency and automate your workflows, consider integrating with Method CRM. See how Method helped a shipping container company’s revenue double in just three years below.

See how Method CRM propels logistics businesses forward.

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