3 Ways Reimagining Your Business Model Can Generate New Revenue

Karen Lynch

Today’s competitive markets demand that wholesale distributors evolve faster, become more efficient, and provide memorable customer experiences. For decades, distributors have thrived primarily on great, existing customer relationships. In the new millennium, simply having great relationships and services are not enough. Today, leading distributors are using digital technology to create, deliver, and sustain new and meaningful customer experiences.

Technology has changed the game, but customers have changed the rules. They want you to interact with them on their terms. They equate their experience to the quality of the product or service they want to buy. Consumers are demanding simple, seamless, personalized experiences across all channels, on any device.

In today’s digital economy, consumers are hyper-connected, informed, and empowered. They have unprecedented access to information, and to each other. And they can partner with and buy from anyone, anywhere, and at any time.

Strong forces are challenging old business models. Customers are getting younger and everyone expects a different experience. They want to do business with you in their own way, not the way you want them to do business.

Distributors must reinvent themselves from being warehouses of products that fulfill demand into companies that use new business models to gain competitive advantage. It is no longer possible to survive simply by breaking bulk to give customers the quantity of product they need and relying on great, legacy customer relationships. To stay competitive, the time to digitally transform is now.

Here are three ways wholesale distributors can digitally transform for new revenue and profit sources.

1. Value-added services distributor

For years, distributors have been providing value-added services, many of which have been free of charge. Leading distributors are taking these value-added services to the next level. They are leveraging them to increase revenue and bottom-line profitability. Consider providing your customers with a menu of a la carte options, such as:

  • Providing light manufacturing and kitting orders
  • Offering virtual training for restaurant operators on how to prepare new entrees or install and maintain equipment
  • Using sensors in products that will notify your customers of equipment downtime
  • Predicting future demand based on weather forecasts and providing replenishment recommendations
  • Acting as a financial institution by providing lending services

2. Real-time distributor

Are you on the path to becoming a real-time distributor? Are you engaging with your customers in real-time in areas like logistics, ordering, payment, marketing via social media, and training?

Industry leaders are developing strategies to leapfrog their competition with initiatives around:

  • Using drones or Uber drivers to deliver orders within hours, not days
  • Tapping into up-to-the minute predictive analytics to track demand patterns for suggested replenishment
  • Incorporating social media feeds into their customers’ apps for up-to-the-minute customer engagement
  • Installing smart vending machines at customer locations or job sites for easy product accessibility

3. Infinite inventory distributor

Innovative wholesalers are making strides in becoming infinite inventory distributors. This reduces inventory carrying costs, yet still gives customers access to an unlimited number of products and services.

Additional efforts are being made to use in-house 3D printing for non-stock parts. Distributors can give their customers a 3D printer and sell them the specs so they can print parts on location, on demand.

Other ideas include the effective use of spot buying to provide an infinite catalog of products. Or becoming a “master” distributor for a group of products or for a geography by fully leveraging business networks.

To digitally transform, wholesale distributors must take an information-centric approach. They should be prepared to adopt new and innovative business models.

With cutting-edge solutions, wholesale distributors can streamline enterprise operations and make the most of real-time predictive analytics, Big Data, mobile devices, and apps to change how information is consumed and how their business is run.

Visit Wholesale Distribution. Reimagined for the new economy.


Karen Lynch

About Karen Lynch

Karen Lynch is the Vice President, Global Wholesale Distribution Industry Business Unit at SAP. She sets the vision and direction and execute the go to market plan to address the needs of Wholesale Distributors across the globe by using SAP solutions.