The B2B wholesale distribution industry is weathering a quick shift in customer expectations. As technology progresses to meet the needs of an on-demand economy, the customers of B2B wholesale distribution are hoping to receive the same degree of service they receive with B2C businesses. It’s quite possible that businesses that don’t do well in terms of effectiveness, sales assistance, and customer experiences risk the loss of customers and drop in revenue.
The customer service angle of developing and being at the helm of a successful distributor business is as much an opportunity as a challenge. A purchase experience that indicates elaborate specifications, configuration, and visualization of the complicated, greatly customized products is what customers expect today.
We recommend that the distributors to take a detour from strategies that focus on organizational factors that could boost just operational efficiency. Moving in the direction of models that place greater importance on external parameters, including customer satisfaction, and eventually into more market-sensitive models spurred by sound decision-making is what should follow next.
Put in another way, if you are in the wholesale distribution industry, it certainly doesn’t mean there is any way for you to avoid the hard truths involved in operating a business. Distributors also need to adopt technologies to encourage successful survival in any vastly active marketplace.
Investing in a strong CPQ solution will offer multiple benefits for wholesale distributors without any delay. In combination with other powerful technology platforms, including ecommerce or even CRM, CPQ can transform your distributor business into a robust instrument for marketing and selling. In addition to providing the consumer with a highly augmented purchase experience, this wholesale distribution business can also amp up the value of the distributor to the manufacturer.
Why Wholesale Distributors are seeing the need to invest in CPQ
- In the wholesale industry, businesses are expected to stay consistent with respect to margin policy while also tracking competitor policies in order to steer clear from running into losses. In addition, successful wholesale distributors keep stiff controls over discounting. The price setting process in such a case takes into consideration service costs, volumes, transportation costs, and returns. Only a wholesale distributor who works with consistent margin policy and eliminates chances of over-discounting can make it big in the industry.
- A typical wholesale distribution business sees multiple phone calls taking place between their inside sales teams and customers. Whenever there’s a new order, the order fulfillment process starts with numerous phone calls to review and establish the accuracy of a quote. In the interest of saving time and winning over the customer, it’s essential that all the guesswork eliminated and the quote process and product search, analysis and selection are accelerated.
- What is the one way in which wholesale distributors can stand the test posed by unpredictable events that impact pricing? They need to have in place a detailed pricing strategy that conforms to parameters that effect profitability, adaptability, and constancy. In competitive sales environments, it is absolutely essential that wholesale distributors support flexible and automated pricing models for floor pricing and customer specific pricing using multiple price control levers.
- Wholesale distributors these days are getting creative as far as deal structuring is concerned. The latest trend, now that the markets could take a while to recover, is to put the business in the market and structure deals so there is some kind of an upside for the company eventually as per future earnings. What needs to happen instead though is deal structuring from a customer’s point of view.
- In order to make the most of possible opportunities in the market, wholesale distributors need to build consistent knowledge base for quote accuracy and ease of on-boarding new sales personnel. This step would not only help them underpin better decision making but also help the leadership team to effectively manage knowledge and information and the management team to capture best practice examples for boosting efficiency.
SAP CPQ & the Wholesale Distribution Industry
Some of the largest global wholesale distributors are winning over industry challenges by leveraging SAP CPQ’s cutting edge technology to achieve measurable business impact by:
- Supporting higher volumes of custom quotes and orders, while tailoring an end-product to exact specifications
- Enabling faster time-to-market for new products and services
- Optimizing the sales process, allowing the sales team to engage with a larger set of customers remotely by reducing sales reps training, administration, quote generation, and negotiation time
- Reducing proposal development time from weeks to minutes and offering a self-service buying experience that can be accessed anywhere, anytime
- Simplifying the kitting and bundling of multi-product solutions and systems with fewer returns
Some of the most compelling accelerators that SAP CPQ offers wholesale distributors include:
Time to Quote: Enables Excel upload of RFQ requests with extensible product search model, ATP, Cost and Sourcing data views for product analysis and selection, RPA for RFQ email to quote conversion, and more
Quote Accuracy: Leverages rules to ensure accurate quotes and help you manage sourcing requirements and product selection and guarantees pricing accuracy with automated pricing models
Collaboration: Features easily configurable approvals and workflows tied to margin rules and enables access to quote revision history
Pricing and Margin Management: Makes available flexible and easily extensible pricing models, extensible models for customer specific pricing and floor pricing, and discount management by product and customer attributes
Value Added Services: Benefit from warranty addition, installation, and maintenance services and configurable services and solutions to product offering
CTO – Services & Products: Leverage custom-delivered offerings via subcontract services for packaging for consumer, sub-assembly manufacturing and adding configurable services and solutions to product offering
To help wholesale enterprises reach their full potential and gain access to newer markets by leveraging CPQ technology—particularly SAP CPQ, we will be hosting a live webinar on Aug 20, 2020, which will focus on the Top Priorities for Wholesale Distribution Business and Technology Leaders. Details follow in the coming sections of the newsletter. Should you or any of your customers be interested in being a part of this live online event, be sure to click on Register here.