Wholesaling

Distribution wholesalers

Sector Overview

• Wholesaler-Distributor (W-D)
• W-D role in supply chain
• Growth and Influence of W-Ds

Essential tasks of Independent Wholesaler-Distributor

• Tend to manage all 8 generic flows passing information and such, both downstream and upstream
• Three great challenges of wholesaling:
• Doing the job correctly (without errors)
• Doing the job effectively (maximum service)
• Doing the job efficiently (low costs)

Innovative Value in Wholesaling

• Stock the right items in the right volume…act as an inventory extension of the retailer
• Organize Federations of business – process designed in advance
• Wholesale-led – growth in consortium relationships (alliances, holding companies, or divisions)
• Integrated Supply – Exclusive wholesaler (or wholesale group) in exchange for high stock levels, and product mix and service levels.
• Manufacturer-led – Create their own wholesale-distributor solutions (e.g.: Volvo bulk warehouse in U.S. near FedEx, Memphis, Tennessee)

Future of Wholesaler-Distributors

• International Expansion
• Reduced cross border shipping costs
• Lower trade barriers (NAFTA, EEC)
• Fundamentals of wholesaling precludes most from becoming international (wholesaling tends to maintain economies of scale by “meeting the needs of a local market”)
• E-Commerce – four wholesaler challenges:
• Broader aggregated geography of markets
• Pricing widely available
• Distribution segregated from other service outputs such as customer service (now wholesaler can specialize in a function and outsource more?)
• Information functions can be 3rd party internet-based institutions
• E-business models
• Independent Exchanges (consolidate buying with online catalogue)
• Supply Chain Networks (internet based integrated supply..EDI software driven expertise)
• On-line retailers impact
• driving growth of larger wholesalers due to “drop ship model”, e.g.: Amazon.com