February 02, 2022
By John Tomblin, Senior Solutions Architect
Los Angeles Bizz, a division of Sofvue, LLC
Printed with permission of Sofvue, LLC and the author
Changes in consumer spending habits, global supply chain disruption, hoarding of toilet paper and paper towels, coupled with rapid technological advancements across the entire shipping, logistics, and supply chain distribution channels, whether sea freighters, semi-tractor trailers or rail, has turned the entire wholesale market on its ear. Hard and set rules just five years ago are gone, and an entirely new crop of smart business owners and entrepreneurs are re-writing the rules.
Now the question is: what does 2022 hold for the wholesale sector in our country. What’s happening in the industry, and what will likely change this year?
1. Increased Concern for Wholesale Sustainability
Wholesale sustainability has become a hot topic in recent years, especially since the start of the global pandemic, but thanks to the increased interest of sustainability (and sustainability-focused startups), the costs have become significantly lower. And as a result, more wholesale distributors are joining together to ensure sustainability.
Here are some ways wholesale distributors can working to improve sustainability across the sector:
- Creating an energy-efficient warehouse to store products.
- Partnering with local suppliers to reduce transportation overhead.
- Minimizing the usage of water and electricity.
- Adhering or exceeding the rules for waste management processes.
- Using low carbon footprint modes of transportation such as electric vehicles, motorcycles and yes, even transport drones.
2. D2c Will Impact the Entire Wholesale Industry
In 2022, wholesalers will have more competition than ever before as manufacturers look to sell their products directly to customers (D2c).
D2C sales in the US alone was $129.31 billion in 2021, and this number is expected to jump to $174.98 billion by 2023, a whopping 50% growth spike.
Leading brands like Nike, Warby Parker, and Dollar Shave Club are selling their products directly to customers, and we’re just beginning to scratch the surface.
For these reasons, wholesalers need to begin creating alliances and partnering directly with manufacturers to utilize their services rather than going it alone.
Here are some ways that wholesalers can showcase their value:
- Highlight your Unique Selling Proposition (USP): What does your wholesale business do best? What primary problem do you solve? Is it fast delivery? Is it low cost? What is it that your business can do better than a manufacturer that makes them want to stay with you?
- Leveraged technology: D2c and eCommerce can still be challenging for many businesses, especially manufactures whose infrastructure is wrapped entirely around the development of products but have little experience with marketing and distribution. That said, by leveraging technology combined with your business’ supply chain, you can become a manufacturer’s direct partner for e-Commerce and e-Commerce distribution and delivery.
3. More Wholesalers Will Invest in Automation
Automation is disrupting every industry, and the wholesale market is no different. In 2022 and beyond, expect to see wholesalers begin to use more automation advances in:
- Accounts receivables and payables
- Product tracking (both in warehouse and in-transit)
- Onshore assembly
Also, automation will enable you to track stock levels more accurately, offering better insights into purchase orders and logistics in real-time.
Additionally, you can invest in a mobile app and augmented API’s that connect all your tools, enabling you to get a birds-eye view of your operations. Another advantage of having a mobile app is that you can run your business from anywhere, any time.
4. Omnichannel e-Commerce Will Strengthen
Every platform is a selling opportunity, and as a wholesaler, you need to be where retailers are.
According to research by McKinsey, 66% of B2b buyers prefer remote human interactions or digital self-service. The same report also indicates that the top three most effective channels in 2021 were:
- eCommerce (47%)
- In-person (37%)
- Video (31%)
This indicates that wholesale distributors will now need to offer a seamless omnichannel experience to their customers.
Wholesale is an ever-changing industry, and this decade will see it morph into something completely new. As a wholesaler, you will need to optimize your business by keeping pace with the latest trends and technology advancements, as well as understanding how these new technologies can be utilized to boost company margins and profitability.
Interested in learning more? Contact one of our Los Angeles Bizz representatives for an in-person or virtual on-line meeting by calling our L.A. office at (909) 997-4393, or our Phoenix office at (909) 845-2747.
Mc Kinsey: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/omnichannel-in-b2b-sales-the-new-normal-in-a-year-that-has-been-anything-but