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The path to a more profitable wholesale business

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The fashion industry is not immune to the ongoing volatility taking place around the world. With signs of an impending recession, brands are taking drastic cost savings measures. Paired with the rising costs of materials due to inflation, business is becoming more challenging and expensive to conduct. To help brands reduce costs while maximizing their profits, we look at what areas of their business brands could be optimising now.

From implementing the right digital solutions to leveraging data to make better-informed decisions, here are five top tips your brand can take to become more agile in the face of market challenges.

1. Mitigate supply chain issues

Even before the pandemic, brands faced an onslaught of supply chain issues. Inefficient supply chains, overseas production, and shipment delays cause brands significant issues downstream, from canceled or reduced orders to last-minute order revisions, product swaps, and potentially excess inventory. A recent report from Retail Dive found that ongoing supply chain challenges in North America could cost apparel and footwear brands between $9 billion and $17 billion in lost EBITDA.

Brands can mitigate these issues by embracing the power of digital connectivity in a number of beneficial ways. For example:

  • Integrating all B2B data flow (including product, inventory, ordering, and payment information) into one synced platform allows buyers to make accurate, up-to-date purchasing decisions.
  • Leveraging gained visibility into availability and delivery timing lets brands prepare items faster for retail merchandising, from photo shoots to product information, meaning items will be for sale at a faster rate.
  • Using visibility into canceled or delayed orders to react quickly by either replacing items or pivoting the buy, which helps with loss avoidance.
  • Being able to review previous orders through the platform means brands know what to recommend, and when they need to replace items or suggest a reorder for buyers, making it easier to develop an ongoing brand/buyer relationship.
  • By having a full overview of sell-through rates for items, brands can forecast future sales and plan even better buys and assortments for buyers.

In addition to having increased data visibility, building an integrated wholesale tech stack allows retail buyers to confidently plan their buys, place orders, and check shipping statuses on their own. In turn, this frees up the time of sales, customer service, and operation teams on the brand side so they can focus on other key activities such as forecasting and strategic selling.

“Having your systems tightly integrated in real-time allows you to quickly make adjustments whether it’s a change on the retail side, the buyer wants to swap, or you have supply chain issues on your end, manufacturing the product. These things happen, and it can compress the timeline. We can make decisions faster. This is why having tightly integrated systems is critical to really take advantage of a B2B wholesaling tool,” - Phil Mueller, EVP, Client Services, NuORDER by Lightspeed.

2. Build the best B2B purchasing experience for retailers

B2B buying behavior has shifted dramatically over the last two years, with a McKinsey & Company survey citing 70% to 80% of retail buyers preferring digital or remote interactions to conduct business over in-person meetings. With retail buyers opting for self-service and remote buying options over face-to-face meetings, how can brands create the best B2B buying experience for retailers?

The solution is simple - create a D2C experience for retailers that is on par with their B2C shopping experience. An engaging, visually driven digital wholesale experience ensures retail buyers have the tools needed to procure the best assortment of products and effectively sell them to their customers. A clean, simple, yet elevated B2B wholesale platform, means retail buyers can visually find and filter what they need quickly and easily.

Sarah Sandberg, SVP, Customer Success, from NuORDER by Lightspeed explains how Spanx created that bespoke, elevated experience through their B2B wholesale platform:

Offering different purchasing paths for retail buyers depending on their needs can further enhance the buyers' experience, as can offering custom assortments, special pricing offers, cart threshold promotions, and history-based order recommendations to make purchasing even more personal. As seen above, NuORDER client, Spanx, was able to drive sales by 3X when using the campaign feature to send customized orders. Preloading products with the complete data (quality photos, pricing, materials/composition, colorways, variations, descriptions in different languages) is one of the most overlooked ways to support retailers in their go-to- market, making it much easier for them to merchandise products for retail.

An elevated B2B platform should function as a one-stop-shop for retail buyers, so they can also look up past orders, key products, fit guides, and more. Your portal can be an extension of your sales and education team that works for you even while you’re away. By leveraging B2C marketing assets on their B2B platform, brands can provide retail buyers with a superior purchasing experience that will likely drive conversion rates.

“Having clear shopping journeys in your B2B experience is critical, everything else helps round out the experience and make it beautiful, but at the end of the day, you are looking to get that order, and you want to create the most seamless way for your customers to do that” - Sarah Sandberg, SVP, Customer Success, NuORDER by Lightspeed.

3. Leverage a hybrid approach when adopting B2B digital solutions

While B2B platforms are significant for wholesale, the need for a hybrid approach is vital for success. Despite the increasing implementation of B2B platforms, only one-third of brands say it's their primary tool for capturing orders (2022 State of B2B eCommerce Report, NuORDER by Lightspeed).

Other channels, including trade shows, wholesale marketplaces, and B2B eCommerce sites, are all integral to success. Gartner reports that 43 percent of B2B customers prefer not to interact with a sales rep at all, and while the majority still want that meeting time, there may be a case where your B2B platform needs full self-serve enablement. By leveraging the best of both the digital and physical worlds, your brand can maximize sales and reduce time spent following up on orders.

Things aren’t purely digital or purely online anymore, meaning your brand needs to be equipped for however dealers want to buy from you.

Whether on the trade show floor or from the comfort of their own homes, B2B buyers need to be able to:

  • Understand key product features
  • View inspiration for the season
  • View delivery dates
  • Identify promotions

“I don’t view things as remote versus in-person. Everyone is virtual at least some of the time and in-person some of the time. Digital needs to be weaved throughout those experiences, and fundamentally we just need to make it easier to find products and order them no matter where people are.” - Phil Mueller, EVP, Client Services, NuORDER by Lightspeed.

Given wholesale is a cross-functional, omnichannel effort, its success is linked to the preparation, commitment, and goals of all teams across the company. One of the best ways to implement digital tools successfully is by finding ways to tap into your team’s strengths across every channel. For instance:

  • Marketplaces are a place for differentiation and discovery. A place where items shine through product discovery, photos, and product information, the correct marketing and merchandising are key to ensure brands move excess items off the shelf.
  • Tradeshows revolve around touch and feel. Live demos and face-to-face meetings with existing and new accounts mean marketing and sales teams must work in tandem with merchandising to create the best physical representation of a brand’s assortment. They are also a place for introducing new collections and creating a statement to attract new potential buyers.
  • B2B eCommerce platforms are a place where strategic promotions and targeted campaigns help drive repeated business with existing buyers. Communications and marketing should work with sales teams to help drive campaigns and provide marketable assets to both new and current buyers, while also offering data-driven custom assortments and sell-through recommendations as needed.

4. Secure the right partnerships

One of the most common mistakes we see wholesale brands make is an over-reliance on marketplaces to drive new business. While they are a cost-effective way to generate new orders, most connections won't turn into long-term, repeat customers.

To build a sustainable and profitable wholesale business, brands should view their retailers as strategic partners helping them to expand their reach and turn consumers into brand advocates. As such, brands should focus on finding the right retailers to work with that have similar consumer demographics to their existing retail customers or even their own DTC business.

5. Use data to make informed decisions

Becoming data-centric is essential for running a successful, modern-day brand. While many brands use data to make critical decisions, making choices based on inaccurate data can negatively impact businesses. According to information from Gartner, making business decisions based on old or bad data could cost small to medium-sized businesses over $15 million in losses annually. By leveraging B2B digital solutions, brands can gain data clarity in key business areas, such as inventory, pricing, and sell-through data. NuORDER by Lightspeed helps brands understand where data is coming from and how they can leverage it to the right area of their business, such as leveraging operational data for transactional and forward-looking decisions.

By using data correctly, brands can better understand and rationalise trends, allowing them to work more efficiently. A truly integrated B2B eCommerce strategy ensures brands can access the right data at the right time and use it to drive value to their business. To find out more on the 5 Pillars of Profitable Wholesale and how an e-commerce partner like NuORDER by Lightspeed can help you, catch the full webinar here.

E-commerce
NUORDER
Retail
Wholesale