10 Tips for Running a Successful B2B Wholesale

Distribution Business
No matter what products you sell, much of what it takes to run a successful wholesale distribution business
today is the same across industries. From hiring and cash flow management, to sales and inventory planning,
here are some tips to succeed in wholesale distribution.

1. Hire the right people.

While it may seem like an obvious tip, to many businesses often fail to put enough effort into the hiring
process. Hiring decisions are some of the most important decisions you’ll ever make for your business. Make
sure that you’re properly benchmarking each new position and evaluating each candidate against that
benchmark, rather than each other.
Also avoid general questions that “guide” the candidate to the right answer, and instead focus on behavioral
questions using phrases like, “Think of a time when…” These will give you a clearer idea of how the
candidate will handle certain situations. For more on hiring sales reps in particular, check out this post by
guest contributor Nancy Bleeke, President of Sales Pro Insider.

2. Stop writing and managing orders manually.

According to a recent survey, order writing inefficiencies were cited as the number one order writing
challenge among wholesale distributors. Too many wholesale distributors are still taking orders down on
antiquated clipboards and paper order forms. Some have taken a half-step towards using technology with
PDF order forms and Excel spreadsheets, but these methods are equally (if not more) cumbersome than
paper.
With the pervasiveness of mobile technology in our lives today, many successful wholesale distribution
businesses are taking advantage of mobile order writing technology, giving sales reps access to customer
information, product catalogs, and an order writing interface right on their smartphone or tablet.

3. Get your inventory under control.

You can’t run a profitable B2B wholesale distribution business if you don’t have a good handle on inventory
management. Some companies have a system of maintaining minimum stock levels in their warehouses,
replenishing with new stock once levels reach the minimum. Others keep safety stock on certain products to
protect against sudden spikes in demand, while others utilize a “Just in Time” inventory strategy, delivering
items just in time for manufacturing/shipment.
Tracking incoming/outgoing inventory, doing regular physical inventory counts, and coordinating your
inventory levels with fluctuation in demand are all key to deciding which inventory management strategies
are right for your business.

4. Give your sales reps what they need to succeed.

Do your sales reps have all the information they need going into sales appointments? Forward-thinking
wholesalers, manufacturers, and distributors are understanding that in order to make sales in this day and
age, sales reps need to add value to their sales conversations, not just go through the motions of writing down
a reorder.
Companies are arming their sales reps with easy access to key information, like customer order history, most
ordered items, and stock levels for each product. They’re also giving their sales reps digital catalogs with
customer-specific pricing already built in, so that reps don’t have to waste their time memorizing data or
looking up pricing. Instead, they can concentrate on what they’re actually there to do: sell.

5. Differentiate on customer service, not price.

Wholesale distributors today are operating in an incredibly competitive marketplace. Many try to
differentiate their brands on price in the hope that lower prices (and margins) will lead to a higher volume of
sales. This approach, however, is not an effective strategy for long-term growth.
Instead, companies who can differentiate their brands by providing great customer service are seeing returns.
Think about how you can create a modern, convenient experience for your customers. How can you fulfill
orders more quickly and replace transactional activity with strategic value?
6. Keep your cash flow under control.
Cash flow is the lifeblood of any wholesale distribution business. One of the biggest mistakes a wholesale
distributor can make is to give an overextension of credit to their customers. Avoid folding to demands for
extended payment terms, and be diligent about collecting receivables. Accept credit cards, invoice/get paid
online, and outsource collection if necessary.
It’s also important to stay aware of your financial status at any one time. Produce regular flash reports that
include information like cash availability, daily/weekly/YTD sales, payables, key inventory, best/worst
selling items, etc.

7. Invest in B2B eCommerce now.

This one is hugely important. According to a recent report released by IT consulting giant Accenture, 86%
of leading B2B companies surveyed are already offering their customers the option of ordering online. Only
14% are not.
As customers get used to the convenience of ordering online in their consumer lives, those expectations for
24/7 availability are increasing in their work lives. Businesses that are able to implement omnichannel
strategies (by allowing customers to order from the rep, on the web, or on a mobile device) are already seeing
returns. Those who do not take these steps will be left behind.

8. Make proper sales territory management a priority.

Territory management is all about making sure that your sales reps are putting the right amount of time into
the right accounts. Many wholesale distributors neglect to effectively segment customers, track sales
performance, and improve sales prospecting strategies. Successful brands create detailed customer
segmentation strategies and detailed plans that are ultimately aligned with the company’s overall objectives.

9. Speed up order fulfillment.

In a survey conducted this year, it was discovered that 68% of respondents can get orders from the field to
the back office in less than 24 hours. 30% could do it in less than one hour. When it came to shipping, 47%
of respondents reported that orders were actually shipped within 24 hours, setting a clear benchmark for the
rest of the industry to follow.
In order to succeed, today’s wholesale distributors must digitize the order writing and submission process to
increase efficiency. If you are selling through multiple channels, like field sales and a B2B eCommerce
portal, be sure to consolidate those orders for faster fulfillment.

10. Build long-term relationships.

At the end of the day, what’s going to make you successful as a wholesale distributor is your ability to form
strong, lasting relationships with your customers. By prioritizing customer service, adding value during sales
conversations, and making faster order fulfillment a priority, you’ll be well on your way to building a long
list of repeat customers.

Just like an interior design business, starting a distributor business can be tough. What’s worse? It gets
more complicated as it progresses from the day you start complying with the business requirements to the
time you open up the store. However, if you choose to persevere, these obstacles should not discourage you
from building it from scratch. Nevertheless, it does not mean that you have to endure the unnecessary
struggles in doing business. Start your business journey by creating a distributor business plan, which we
are going to discuss in this article.