Six Ways to Reduce Expenses in Wholesale Distribution
If your business engages in wholesale distribution, maintaining efficiency while reducing expenses is an important pursuit. At Markinson, we’ve put together several ways to improve wholesale distribution management while reducing your costs:
Inventory is expense
Everything in your warehouse is incurring a cost. Keep inventory as low as possible by implementing systems that allow you to treat your warehouse as a node in the link between your supplier and customer, and not as a home for goods. Also, identify slow-moving inventory and price it to reflect its higher warehousing cost.
Manual processes equal added costs
Business-wide electronic and real-time tracking not only reduce costs by improving processes within your business, but also makes your business more attractive for customers (and suppliers). Share your data with customers and suppliers so that they know what you have stocked, what you can source, where products are, and how long they’ll take to arrive. Doing so will help to move your inventory – creating revenue while reducing storage costs.
A better crystal ball
Your sales team’s projections aren’t the only way to predict future demand. Focus on using the information generated within an enterprise resource planning system such as MomentumPro as a more accurate predictor of future trends.
Eliminating duplicate systems is a quick way to reduce costs. Drive cost reduction by ensuring there’s a single point of responsibility in your business for keeping a handle on excess inventory. Don’t forget the basics, such as getting rid of aging inventory.
Prioritise cost reduction
Make reducing costs a priority by creating KPIs around expense reduction. If you don’t have one already, create a dashboard view of your expenses, report on them, and ensure that the business is aware of where its costs lie. It may not always be as glamorous as sales, but reducing costs plays just as valuable a role in improving profit.
Drive down your cost of processing sales and extend the hours you can trade and regions you can target. Provide a self-service portal for customers to free up your customer service resources.
Contact us to find out how we can provide solutions for your wholesale distribution challenges.