HOW DO WHOLESALERS SUCCEED?
• In the ever-changing phase of business world, being a successful wholesaler becomes a challenging task. Especially because consumers are getting smarter and have several options at their disposal. Consumers are trying to get rid of the middle-man and trying to purchase the respective goods from producer themselves and thus save more money.
• To be a successful wholesaler, it is of utmost significance to analyse his business and bring in the most efficient and necessary changes to keep up with the market.
WAYS TO SUCCEED AS A WHOLESALER
• The wholesalers must concentrate more on local market share than that of their national market share. The simple reason being that when your local market share is higher than that of your competitors, you indirectly acquire a substantial amount of market share nationally as your company expands. In a way, small local markets eventually pave your path towards acquiring a bigger market share.
• Cutting down on operational costs is a major factor to improve one’s profit. Management of assets like inventory, machinery, sales force, etc efficiently helps the company maintain a good margin. Thus, innovation in the process of manufacturing and dealing with the product could lead to cutting down of unnecessary costs which can be easily avoided for the betterment of the company.
• Wholesalers to succeed could employ fresh and efficient technology to cut down on operational costs. Effective and suitable technology improves productivity and also keeps the wholesaler ahead of his competitors.
• Ways to increase the wholesaler’s gross margin needs to be considered as per the service provided. Efficient processes that provides maximum yield with minimum consumption needs to be chalked down and implemented.
• Wholesalers work on bulk production and thus, economies of scale needs to be addressed. A successful wholesaler employs economies of scale when it doubles the output of the company at less than twice the cost of the inputs.
• Wholesalers should consider economies of scope as well. The introduction of economies of scope occurs when the wholesaler could produce a combination of two independent products with the limited inputs at a cheaper price than he could by producing both the products differently. This involves reduction in percentage cost of production as the output increases substantially with two products.
• A successful wholesaler has futuristic goals and thinks of the long run. In a long run, almost every input can be considered to be variable. Therefore, the decision regarding the quantity of inputs depends not only costs of factors of production but also to a large extent depends on the substitutes available for the same inputs and the cost difference that they come with, in the production process. The selection of the cost-minimizing input can be made by finding the tangent point on the isoquant curve which depicts the firm’s desired output and the isocost line.
• Innovative ideas to place the wholesaler’s product in the market is of critical importance. A successful wholesaler would market his product in a unique and novel manner that will be distinct from his competitors and vivacious marketing attracts consumers easily.