Why wholesalers should take a risk and embrace disruption

Carl Hillier, head of operations, OGL Software

There’s no getting away from the fact that doing business today is getting more expensive. The Covid-19 pandemic hit component and product availability hard. Brexit added new cross-border challenges and staffing shortages. Then, along came war, inflation and the energy crisis to further affect supply chains.

In the long term, we’ll get used to an even newer norm and be stronger for it. Interest rates and higher costs of borrowing will draw down demand, and inflation will drop. However, wholesalers must be ready for changes in consumer behaviour.

Profitability takes a hit

In OGL Software’s Profitability in UK Wholesale Businesses report, the key factors affecting profitability were the Covid-19 pandemic (54%), Brexit impact (38%), manual processes (33%) and stock availability (32%). It’s likely the energy crisis and recession will appear as factors this year, too.

We are in a crisis, so the top priorities for survival still hold true today for wholesalers, from effective management of cashflow, having a robust sales strategy and exploring routes to market.

We also need to move away from manual processes, as a third of respondents believe they negatively affect profitability. Eighty-two per cent of wholesalers are turning to technology to become competitive, and 76% have switched to cloud hosting of applications. Indeed, technology – especially ERP software – can help to take tighter control of operations to create efficiencies, improve processes, reduce costs, price appropriately and reach customers effectively.

Initiatives to stay in business and get ahead Businesses realise that efficiency and technology go hand in hand – 86% of respondents agreed technology is vital to the efficient running of their businesses.

While some still have manual processes, others are running multiple systems, with 68% seeing the benefits of integrating disparate systems.

Adding a single, comprehensive system can streamline business operations and increase productivity, as well as providing the data required to make informed business decisions.

Cloud-based software with intuitive consumer-like interfaces improve the employee experience, enabling them to be motivated and make an impact for their employers.

The inclusion of stock and order management, full CRM and e-commerce integrations in the latest ERP systems for stockists means it’s easier to reach and engage customers, keep them happy and sell online. Nurturing customers is vital during a downturn.

OGL has recently worked closely with the wholesaler Cater4you. This is a good example of a company using integrated software.

Its website was extremely busy during lockdown, but with the integration into our software, the company was able to stay in control of stock and manage customers’ expectations.

As part of a move to multichannel selling, they said: “We’d see products sell out in three-tofour hours and we’ve never seen products sell that quickly, but the system made us more efficient, so we were able to cope with the sheer volume and be equipped to come into the office on Monday to send out more than 500 orders.”

Shake off despair, embrace risk and profit

The pandemic started to prepare us for the rough road ahead. As a result, many in the wholesale sector see managing cashflow better as a priority (81%), no surprise for a niche severely affected by rising business costs. But using software adaptable to new business models also featured strongly (78%).

Given the current business outlook, there is an argument to say there is more reason to take a risk, and embrace a little business disruption, when there is a chance to survive and prosper with a refined, streamlined, multichannel operation. l