Think Small: Three Ways SMB Distributors Can Out-Compete Their Big Business Rivals
The Internet has made it possible for smaller, “insurgent” companies to compete with their larger, more entrenched counterparts in meaningful ways. Cloud-based business tools (CRM, ERP) enable those with fewer resources to gain critical market insights and achieve operational efficiencies previously beyond their reach. Sophisticated, search-optimized websites enable them to affordably – and in some cases, rapidly – build large customer bases. The ability to automate a range of processes allows them to scale, thus lowering costs, increasing margins, and accelerating business growth.
Still, larger, more established companies will always have a number of built-in advantages as they simply have more resources to throw at a “problem,” while making it harder for smaller companies to threaten their dominant market position.
But smaller companies have one critical advantage: their relative agility. Harnessing their nimbleness and focusing on the following core areas will allow small and medium sized businesses distributors to more effectively take on their larger rivals:
- Smoothly integrating new technologies with legacy systems (or supplanting them).
- Using mobile apps for immediate customer interactions and more responsive support.
- Warehouse optimization for expedient delivery.
The larger the company, the more bound they are to legacy systems. Moving to another platform, even if that platform is demonstrably better, is an expensive, time-consuming and highly disruptive undertaking. The IT department will typically default to the “path of least resistance,” and make fixes to address shortcomings or make modest improvements.
If you are a small to mid-sized distribution company, chances are your company has legacy software in place, or at minimum spreadsheet programs created early on, to manage distribution. But such minimal tools are not built to scale; as the business grows, emerging companies need to look for more modern and robust solutions to integrate with – or replace – these legacy tools, providing the functionality and flexibility to scale and provide a command view of the entire operation. For smaller, fleeter companies, making incremental, even wholesale change is far easier than it is for larger companies – giving them a leg up in their ability to seize opportunities in rapidly changing markets.
Mobile technology gives small businesses an “ear to the ground,” enabling them to make customer service and sales more responsive and efficient. By optimizing mobile tech resources, companies don’t have to wait for the end of the day to know where they stand, giving them the ability to capture real-time feedback on customer likes, dislikes, recommended improvements, what’s trending, plus stats and analytics of where business is transacted…in sum, a comprehensive snapshot of customer trends and sentiments that can be captured at any time, from anywhere.
SKU Numbers in large volume, dimension classifications, shipping parameters, actual warehouse locations plus addressing mishandled, incorrect or damaged goods can quickly make or break a distributor’s reputation. Standing behind an order or cutting down on back-order time may be easier in theory for SMB distributors to handle personally, but they will have to scramble to find an alternate solution. Integrated technology can go a long way towards rectifying individual cases, but as many a distributor knows, dependence on single or limited suppliers cannot be cured by even the best management tools. Survival means having 24/7 what customers want, available when and where they want them.
For small and midsize distributors and wholesalers, continuous improvements in business processes are key to maintaining a competitive edge and managing growth. Addressing the three areas outlined above will deliver immediate and significant returns.
You can access this white paper Ideas for improving warehouse performance for additional tips on improving efficiency of your warehouse operations.