During a recent conversation with some entrepreneurial retailers, we got to talking about choosing which vertical markets could be worth investing in, and what the initial and ongoing effort would be to manage the end to end relationship from distributor to end user.
Having worked at the sharp end of multi-channel IT resale, we know that this market place is fairly mature, with manufacturers, distributors and resellers alike, investing in the technology and solutions that allow for swift transactions and delivery of product.
Having had a few experiences of our own and talking to others, we quickly realised that there are still a fair amount of distribution and wholesale companies out there whose business models are still very antiquated and unsupportive of a modern, multi-channel, commerce model. Some of the biggest obstacles, for new or established businesses wanting to sell products supplied by these companies, are the inability to process orders electronically and to drop-ship product directly to the end customer.
Over the last 10 years we have built and delivered many integrations that have enabled distributors and resellers alike, to streamline and automate their businesses process, allowing them to focus on their most important assets – their customers.
Below we have come up with some key points to think about, when considering the landscape of your chosen vertical market – does it support a modern, multi-channel, commerce model?
Good conditions:
- Technology and integration available at the retail end (infinite possibilities with e.g. Magento)
- Technology and integration available at the ERP end (Brightpearl / Netsuite, etc).
- Availability of SAAS models rather than large CapEx investment required in systems.
Commercial considerations:
- Margin availability
- Operational cost – simplicity of dispatch / commoditised products, do I have to hand-code my products, and do I have to hand-price my products?
Which leads us on to:
- How quickly can I get up and running in this market?
- How quickly can I induct new products to market?
How easy are the distributors / wholesalers to do business with?
What’s their purchasing mechanism (telephone? fax? email? – NO GOOD) In order for a distributor to be modern, and easy to do business with they need to provide:
- Automated stock and price feeds (via private FTP mechanisms with the possibility of per-retailer pricing)
- Purchasing portal
- Marketing and product collateral
- AND IDEALLY A DROP SHIP MODEL
Layer 5 can help with all of the integration between the distributor and retailer, including stock, price, product content AND coming soon in a future post… automated electronic retailer purchase order, distributor / tracking dispatch notification, and invoicing.
Get in touch: 0161 850 4545 or email enquiries@layer5solutions.com