- Wholesalers Help Distributers Diversify
- Diversifying Beyond Jan/San
Inventory Benefits Of Wholesalers
Inventory maintenance has been, and continues to be, a problematic area for distributors. Instead of tying up capital on slow-moving inventory, by working with wholesalers, distributors are able to shed their otherwise taxing inventory strategies. Often referred to by distributors as their second warehouse, wholesalers stock lines and items for distributors that otherwise would cost too much to purchase direct from manufacturers.
“When buying from a wholesaler, distributors are required to buy far less inventory, enabling them to turn their merchandise much faster which allows them to make more profits,” says Heeren. “Because of this, a wholesaler is many times the most profitable vendor a distributor uses.”
Wholesalers also make purchasing convenient, because distributors are working with only one vendor instead of being tied to multiple contracts.
Overall, wholesalers help distributors maintain smaller inventories. Instead of having to meet large order minimums by manufacturers, distributors can use wholesalers to purchase small quantities, while also having access to a complete line of products from a plethora of national suppliers.
“It’s the age-old story of distributors needing to meet minimums with manufacturers if they’re able to buy direct at all,” says Moon. “We take that element out that they don’t have tie up their capital. For the medium-sized, little, or the local guy, we’re an absolute essential service for them. So that he can buy 10 cases of something rather than half a truckload or pallet of something.”
The jan/san market will only get tighter as more untraditional suppliers target end-user business. However, diversification into new product lines and customers will help alleviate the pressure for distributors.
Nick Bragg is a freelancer based in Milwaukee. He is a former Deputy Editor of Sanitary Maintenance.
Diversifying Beyond Jan/San
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