Every entrepreneur wants to run a successful business, but only a few industries remain resilient through unpredictable challenges. And when it comes to the distribution industry, things can often become quite unpredictable. According to statistics, the gross value in the wholesale and distribution industry in Australia was AUD 85.6 billion in 2023.
For new investors looking to succeed in this dynamic space, having a solid strategy is essential. Here are some key tips to help you build a profitable distribution business.
1. Have the Right Team
No matter what type of wholesale distribution you have, hiring the right people is essential. Although it might seem obvious, many business owners don’t put enough effort into selecting the right people. Clearly define each position and understand the specific skills and qualifications required for each role. During the interview process, ask candidates a mix of both theoretical and practical questions to test their hard and soft skills. Try to avoid general questions because that will give you vague answers. Instead, ask them situational questions as to how they’ll handle a particular problem or manage working with others.
2. Implement an Effective CRM System
A Customer Relationship Management (CRM) System is vital for maintaining data integrity and tracking all products entering and leaving your distribution network. When implementing a robust CRM system, focus on features like contact management and streamlined communication. You also have to integrate the system with your current inventory practices to make sure all your raw materials, packaging materials, and other items are in store. A good CRM system with AI capabilities will allow you to store information about each customer, such as details of their purchase history, the items they have purchased, identify trends, and the due date of the next purchase.
3. Prioritize Value-Added Services (VAS)
Value-added services (VAS) are also a crucial aspect of any good distribution network. These are the additional services that a third-party distribution network provides to businesses that wish to outsource their products. When you’re looking to acquire distributors for sale in Australia or any other part of the world, you have to check the kind of profit margins and discounts it offers. Most distributors focus on the conventional style of offering lower prices and higher discounts. While discounts and competitive pricing offer short-term gains, long-term success relies on offering services like fast delivery, custom packaging, installation, repairs, and assembly.
4. Embrace Automation
If you’re still working manually and writing and receiving orders by putting down things on paper, it’s time to modernize. Every industry today has adopted automation and technology, so when it comes to your distribution network, you have to make the best of the technology available to you. When you write down everything manually, it can lead to more errors and slower order processing times. Instead, try out mobile order technology or computer-based features like Excel or Spreadsheets. You can also check out different distribution software that comes with AI-powered systems that can significantly enhance efficiency. These tools will help you track orders and predict customer needs, leading to smarter decisions and better customer service.
5. Create an Efficient Office Setup
A well-functioning office is essential for running a distribution business smoothly. If you use a small storage room as an office, you won’t get things done. Having a large enough office space puts things into perspective and will also motivate you to keep the company running more efficiently. Invest in good lighting and ventilation systems because you’ll likely have to spend a lot of time in your office. Ensure there are comfortable chairs and couches with ergonomic working desks. You may even have a small setup for an assistant who will answer calls and prepare your daily schedule on your behalf. A good office will motivate you to make the day more productive.
Conclusion
One important tip that many distributors follow is to strengthen their already-existing relationship with customers who have been purchasing for a long time. Establish common goals and try out newer methods of advertisements and promotion with these customers to maintain long-term benefits.
