Wholesalers obviously are in the business of stocking product for their customers. They absorb a lot of the lead time cost and risk for the benefit of their customers. Inventory is the largest physical asset on the balance sheet offset by the credit lines used to pay for the inventory.
SKU count is large, often in the tens if not hundreds of thousands. Multiple warehouses adds to the complexity.
So the financial impact of holding the optimal quantities of each SKU at each location is very significant and is magnified by the sheer number of SKU / locations that wholesaler buyers must manage in order to serve the customers and markets that their companies target.
Yet most wholesalers let their buyers struggle with the simplistic inventory replenishment functionality in their ERP systems, supplementing with spreadsheets, a lot of labor intensive manual review and calculations, and buyer experience and intuition. Since the inventory carrying cost is estimated to be 20-25% of the inventory valuation, and inventory value for most wholesalers is well into the millions and tens of millions of dollars, efficiencies gained in this area can easily and quickly add multiple points to the profit margin. Read Forecast Accuracy Metrics to see specifically how improvements in forecast accuracy alone will increase your fill rates and reduce your inventory.
Complexities Handled by Thrive Wholesale Distribution Software
Here is just a sampling of the number of variables that optimal buying must manage, and that Thrive’s patent pending inventory science wholesale distribution software addresses:
- Accurate estimation of upcoming demand for each SKU / location
- Lead time variability
- Long lead times for importers
- Transfers of stock between locations
- Seasonal demand
- Large SKU count
- Vendor minimums
- Deal buying
- Promotions / events
- Buyer turnover / attrition and loss of that knowledge
Industries that Benefit from Wholesale Inventory Software
Thrive has had great success increasing inventory profitability with our wholesale inventory software for wholesale companies in the following industries:
- PVF (pipes, valves, and fittings)
- Automotive parts
- Welding supplies
- Medical supplies
- Industrial supplies
- Building supplies
- Wine and spirits
- Office supplies