Wholesalers' Contributions to Supply Chain

Wholesalers' Contributions to Supply Chain Efficiency The majority of manufacturers rely on indirect channels of distribution for their revenues, opting to resell their products through resellers, dealers, distributors and wholesalers. There are many advantages to relying on an indirect channel strategy that capitalizes on the strengths of wholesalers. First, there is the critical role wholesalers provide in supply chains, completing order aggregation and the pick, pack and ship functions necessary to fulfill orders from the resellers, dealers, other wholesales, distributors, and in some cases, direct customers they sell to.

The wholesaler makes it possible for manufacturers to increase the number of customers sold to without taking on the costs and risks of operating a direct sales force. The greatest benefit to manufacturers of working with wholesalers is the ability to reach a significantly larger number of customers than would otherwise be the case if they worked on their own.

Manufacturers often have completely separate strategies for the managing of their indirect channels, often having to measure and evaluate the strengths and weaknesses of strategies at selling more through indirect channels (Columbus 2003). The use of dashboards has become commonplace in many manufacturers, as they strive, from the supply chain perspective, to have visibility back to their suppliers. Conversely when manufacturers are selling through indirect channels, the need for synchronizing all aspects of incentives, pricing, warranties, and return policies across wholesalers is critical.

The distribution of sales opportunities, often called lead generation and escalation, also is a critical in keeping wholesalers loyal to.