Wholesale distribution industry news – 7 pointers that may help to prevent a business from going down in 2024

The picture of wholesale distribution industry in 2024

The report from Research and Markets forecasts that the wholesale market size will reach $68,092.65 billion by 2028, growing at a compound annual growth rate (CAGR) of 6.5%. That was perfect news for those who are still running a wholesale, distribution, or trading business today. Yet, if you’re a wholesale distribution owner now, you have definitely endured the struggles through the market and the customer’s pressures, specifically after the black swan of COVID-19 in 2020-2021.

With those who just joined the industry, unsurprisingly you are facing immense struggles too. As published by Global News Wire, wholesale distribution businesses are faced with escalating inflation, increasing interest rates, a poor labor market, and competition for talent and specialized skill sets. But running a new wholesale distribution and trading business is like a hamster between a cat and its owner! On one side you are navigating industry challenges, on another, you are fixing the entire operation of your company.

Together, it is necessary for everyone to be at the top of their operation management game, especially when dealing with the challenges of interior and exterior environments. Understanding the right approach to survival in this industry in 2024 might be the best abundance now.

7 pointers that can help your business survive in 2024 and beyond

1. Warehouse cost

A very first mistake in the wholesale distribution industry is underestimating the amount of warehouse cost. You would think this cost would be small because it was separated into many components. However, the true expense lies in efficient space utilization within the warehouse, directly impacting storage duration and capacity for products. Your initial perspective on warehouse expenses might seem optimal, with efficient space utilization and potentially incorporating automation in management. However, if it becomes apparent that your approach isn’t as effective as anticipated, the resulting increase in warehouse costs can be substantial.

Some wholesalers choose to locate their warehouse in another country to reduce warehouse costs and increase efficiency in the order fulfillment process. This method is really effective for businesses in countries with high tax rates. But there is one thing you must be sure of before choosing to set up a warehouse in another country: the warehouse price must be reasonable. Many businesses have gone bankrupt because of incorrect calculation of warehouse costs.

The cost of operating a warehouse is influenced by numerous factors including labor expenses, the dimensions of the storage space, shipment volume, the nature of stored goods, duration of facility usage, and the sophistication of inventory management technology employed. Simply, warehouse costs encompass labor costs, facility expenses, and the costs associated with technology or other operational necessities needed to run it. Here are some most prominent ways for you to reduce warehouse costs.

Firstly, prioritize analyzing warehouse operations thoroughly. Through careful assessment, identify areas for potential cost reduction. From the results, this could involve implementing inventory management software like EMERGE to enhance inventory control, optimizing space utilization, or streamlining processes such as automation and climate-controlled storage.

Another effective approach is to outsource operations whenever feasible. Particularly beneficial for startups or small businesses lacking substantial funds for in-house warehouse operations, outsourcing can serve as a crucial support. By entrusting warehouse services to third-party providers (3PL or 2PL), businesses can save resources otherwise allocated to staffing, equipment, and maintenance. Moreover, outsourcing often grants access to more efficient storage and distribution systems, further contributing to cost savings, without the hassle of managing your team.

2. Price element

As a wholesale distribution and trading owner, you might think going after cheap pricing will win the market. But that thought is no longer valid! Everyone has more or less the same suppliers or manufacturers, how low do you think you can price your product? Your competitors can easily outsmart you by placing a bigger MOQ with your manufacturers to negotiate a lower price.

Going after cheap pricing only works if you are able to make considerable margins from it. Again, we’re talking about trading & distribution businesses here with generic white goods products.

Nowadays, when competition becomes increasingly fierce, companies have to rush over each other to gain market share. Most businesses choose to decrease the price as cheaply as possible and sometimes, they even strive to undercut each other’s prices. “You make it cheap, I will make it cheaper”. After all, this approach is just an endless circle that could lead your company to bankruptcy. So the advice is do not follow the cheap price unconsciously.

Instead of providing cheap prices, you can also give value to customers in many other ways, such as offering exceptional service. Providing timely assistance, addressing concerns promptly, and going above and beyond to ensure customer satisfaction can significantly enhance their experience.

Another way to add value is to offer high-quality products or services. Customers often prioritize quality over price. At some wholesale distributors of fabric or clothing materials, featuring many premium handcrafted products or top materials can set your offerings apart from competitors.

Additionally, providing convenience can be a significant value-add. This could involve streamlining the purchasing process, offering flexible payment options, or implementing hassle-free returns and exchanges.

In short, by focusing on delivering value beyond just low prices, businesses can foster loyalty, attract new customers, and differentiate themselves in the market.

3. Everchanging product and development

The wholesale distribution industry is predicted to experience major growth in the industry from 2024 to 2028. Over the next four years, there is potential for established companies and new entrants to dominate the industry. However, increased competition will bring with it the need for consistent development and innovation in products and services as consumer demand increases.

Consumers are faced with a vast array of options across various brands, models, and wholesale providers and they have all the choices to choose, a buyer-centric market. To position yourself as the preferred choice for customers, it’s crucial to ensure that they perceive exceptional value in the products they purchase from your company. This means consistently prioritizing the delivery of superior value at any cost.

By improving your product range, sourcing superior goods, and providing exceptional services such as swift shipping, generating an empathetic customer support department, and favorable sales and after-sales terms, you can cultivate strong customer loyalty and direct your business to a good position in customers’ minds. These efforts are pivotal for securing your company’s position in the competitive marketplace and establishing your brand as a trusted provider of valuable products.

4. Differentiation

We are living in an over-communicated world where the customers have felt numb to the advertisements. The goal now is to ensure they retain awareness of your company’s name, what you offer, and the value you deliver. Differentiation is a necessary condition for your brand’s presence in the minds of customers.

When it comes to differentiation, there are numerous examples to draw from. In the wholesale distribution industry, differentiation typically revolves around supply chain and corporate strategies.

Focus on delivering superior service to customers is an effective approach. This entails providing exceptional support before, during, and after the sale. Prompt responses to inquiries, efficient order processing, and proactive communication regarding shipments can all contribute to a positive customer experience.

Innovation in products or services can set a wholesale distributor apart from competitors. By continuously innovating and staying ahead of market trends, wholesalers can attract customers seeking cutting-edge offerings.

Regardless of any specific differentiation strategy you employ, one common denominator for success in the wholesale industry is ensuring a robust and efficient supply chain. A well-managed supply chain is essential for timely order fulfillment, inventory optimization, and minimizing disruptions. Whether sourcing products domestically or internationally, maintaining strong relationships with suppliers and implementing effective inventory management practices is crucial for meeting customer demand and achieving business objectives.

In conclusion, while differentiation in the wholesale distribution industry can take various forms, focusing on superior service, innovation, cost efficiencies, and a robust supply chain are key drivers of success. By adopting strategic approaches to differentiation and continuously striving to add value for customers, wholesale companies can strengthen their competitive position and thrive in today’s dynamic marketplace by adopting a strategic approach to differentiation and continuously striving to add value for customers.

5. E-commerce (B2B e-commerce platform)

E-commerce is becoming more significant in any business. In the wholesale distribution industry, e-commerce is an important part of a company shown by the percentage of total net sales. For global wholesale, distribution, or trading companies, e-commerce plays a pivotal role in gross profit generation. It offers amplified efficiency, broader market reach, cost efficiencies, and enhanced customer experiences within the wholesale sector Some big e-commerce wholesale names are Global Source, Canton from China, and Jungle Scout.

A noteworthy instance occurred in August 2023, highlighted by the United States Census Bureau, where e-commerce estimates surged by 7.5% (or 1.4%) in the second quarter of 2023, compared to a modest 0.6% uptick (or 0.4%) in overall retail sales (Research and Market). Consequently, the escalating prominence of e-commerce serves as a crucial catalyst for the expansion of the wholesale market. As emphasized earlier, expanding market share abroad should always remain a top priority for wholesale distribution and trading businesses.

It’s essential to leverage the global/domestic supply chain with an e-commerce system to provide optimal service to your customers. For larger companies, deploying software to manage these processes becomes imperative. EMERGE offers both inventory management and e-commerce platforms, making it an excellent option. By integrating with Shopify and WooCommerce, all your data is centralized, enhancing business efficiency and accuracy.

6. Customization

As previously discussed, customization is a powerful way to enhance value for your customers. Personalized experiences such as tailored recommendations, customized products, and individualized assistance can significantly elevate the perceived value for customers, making them feel appreciated and understood.

Your customer base extends across various countries and industries. As wholesalers or distributors, it’s essential to tailor your offerings to meet the specific needs of each customer segment. By providing precisely what they require in a convenient manner, your company can establish a strong market position. This entails understanding the unique requirements of customers from different regions and industries, adapting your product range, pricing, and distribution channels accordingly. With a nuanced approach to customer segmentation and targeted offerings, your company can effectively cater to diverse markets and gain a competitive edge.

With EMERGE, you are capable of creating customized E-carts for each customer, tailored to their specific needs and circumstances. This means your customers can conveniently order what they require, anytime and anywhere, without being inundated with irrelevant items. EMERGE‘s personalized EMERGE Cart (b2b e-commerce platform) ensures a seamless and efficient ordering experience, perfectly aligned with your customers’ businesses and demands.

You have the flexibility to customize special pricing, promotions, terms and conditions, as well as tax preferences tailored to specific customers. Additionally, you can selectively choose which product lines are visible to each customer, giving you full control over their browsing experience.

7. The culture of a company

The culture of a company is not the most important thing, it is the only thing. It drives the entire operation of the business. People, products, and services are the three pillars that form a company. People are the ones who manage, manufacture, and ultimately deliver the results of the company. Therefore, people, or the culture of the company, can be likened to the wheel of a bike.
In the wholesale distribution industry, a company’s culture encompasses its customer support department and the additional services it provides. This makes the training period for employees crucial. Once your company has established excellent services and valuable additional offerings, maintaining that status is essential for sustained success.
As the saying goes, “Happy employee, happy customer!” Remember this.

To maintain a good quality employee, there is no way around except providing a good job for them. Bring them the opportunities to be promoted, offer them a reasonable wage, generate a healthy environment in work, create the company’s culture, etc.


You know, it’s pretty much impossible to avoid risks, especially the ones that can hit any business at any time. But doing something about it is way better than sitting on our hands, right? So, this article isn’t just about avoiding problems; it’s also about making sure your wholesale business is running well and strong enough.

Hope you picked up some useful tips.

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