The key to being a successful wholesaler is recognising the fact that it is all about supply and demand. You must have the right products, at the right time, in the right quantities, and at the right price. But how can you predict these factors? Business Intelligence for wholesale can help.
The very nature of wholesale business means that companies in this sector deal with large volumes of products, and this subsequently leads to large volumes of data.
Many, or in fact most, wholesale distribution companies will have some kind of data management software already in place to handle these data volumes – typically in the form of an existing ERP system.
However, few of these companies have gone one step further and implemented a successful business intelligence solution on top of this, something that truly exploits the value of the data they have buried away in these systems.
In this article, we look at just how important business intelligence for wholesale can be, and why more companies should be looking to invest in this area of their business.
To remain one step ahead of the competition, you need to anticipate fluctuations in the market and reflect these in your procurement decisions to ensure you are suitably equipped to meet demand.
The problem is that without sufficient insight, or with inaccurate data, these forecasts can often be way off the mark. This can be extremely detrimental for wholesale businesses and may often end up with large stockpiles of products that are difficult to offload.
An effective business intelligence for wholesale solution can give these businesses a much deeper level of insight into market trends, providing a much more reliable foundation on which to forecast future demand.
Analysis of empirical data can also be used to highlight any cyclical or seasonal trends in demand.
Profit margin analysis
For a wholesale business to be profitable, it is not only important to sell large volumes of products, but also to ensure these products have a decent margin. Business intelligence for wholesale can help you analyse which products bring the best margins.
For example, many of our clients use Matillion BI to create high/low margin reports.
These reports automatically highlight product sales where the margin is low (under 5%, for example) and this information can be used to influence future purchasing/pricing decisions. Conversely, these reports can also flag products where the margins are extremely high, sometimes suspiciously so, and in these circumstances, these outliers can often be attributed to manual data entry error.
Supply chain management
Business Intelligence for wholesale gives companies much better visibility over their supply chain operations.
In short, it enables businesses to look at how actions by suppliers, customers, and logistics partners all impact on their manufacturing operations, inventory holdings, and downstream distribution operations.
Armed with the information that business intelligence for wholesale provides, businesses can in turn take action to eliminate profit-sapping costs, driving improvements in profitability directly to the bottom line.
Want to find out more about the benefits that Business Intelligence for wholesale can bring to your company? Download the free e-book below.