How to use Inventory Management Software for Wholesale Distribution

How to use Inventory Management Software for Wholesale Distribution-feature image
April 11, 2023 Reviewed By : Tanveer Ahmed .7 Min read

Summary: Wholesale distributors need to streamline their inventory management to optimize their cost, storage, and supply demand cycle. Inventory Management Software can automate inventory management and alert companies in time to take necessary actions.

Wholesalers have been under immense pressure in recent years. The supply chain is in shambles and shipping delays plaguing businesses worldwide have further burdened the wholesale businesses.

In this digital world, businesses also need to have a robust omnichannel presence to cater to customers who wish to purchase online. To cope with the changing landscape, wholesale distributors are adopting new inventory management techniques for smooth business functioning.

However, one software that can solve most wholesalers’ problems is Inventory Management Software. Inventory Management solutions help companies track their goods throughout the supply chain, from making a purchase to production and delivery.

It helps the company manage its stocks so there is always a regular supply of goods and wholesale distributors can timely procure items that have reached the threshold level.

Inventory Management Challenges Faced by Wholesale Distribution

Wholesale distributors have been burdened by the demand-supply mismatch. With online shopping becoming the norm and customers expecting a quick delivery time, the distributors are faced with a barrage of challenges.

  • Improper Inventory Management

One of the major challenges that wholesale distributors need to deal with is inventory management. The extreme sides of inventory management are overabundance and unavailability of products. Unavailability affects the retailer-wholesaler relationship whereas overabundance means the wholesaler needs to spend extra cash to store the product. Either way, the business is affected if it fails to manage its inventory.

  • Imbalance in Supply and Demand

A successful wholesaler relies on the management of the supply side and the demand side. If they are in perfect harmony, the business would be able to easily acquire the product and ship them out to resellers in no time.

However, if either side of the spectrum is affected due to either supply chain limitations or a shrinking market, the business gets affected.

  • Measurement of Product Profitability

Distributors sometimes fail to measure the profitability of their products. They might be missing a lot of costs that may not be apparent.

For example – the manpower to move any inventory around, storage costs, delivery, and transportation. These hidden costs can directly affect the overall profitability of a wholesale business.

  • Low Profit Margins & Cash Flows

For businesses, improving profit margins and cash flow is at the forefront of any strategy. The challenges faced by wholesale and retail businesses are many:

  • Costs of inventory storage
  • Bidding wars to acquire new orders
  • Late payment against invoices
  • Financial difference due to forex transactions

Most of the situations mentioned above are dynamic, which means a company might purchase a particular product at a specific cost and store it in the warehouse. However, the change in the market price after a few days can affect the overall profit that the company can generate from the product.

  • Slow Growth

Today, every industry and business want faster growth. However, wholesale and retail traders see an annual growth rate of 5%. If you compare this figure with other sectors, while it is not bad, there is a lot of room for improvement. The reason for this slow growth is the lack of relationships and business expansion.

Target’s Failed Expansion into Canada: A Case of Failed Inventory Management
After being a market leader in the US, Target aimed to expand in Canada. In order to do that, the company needed a way to track its inventory levels.

The executives went ahead with a new untested system. This meant that an untrained workforce was working on a tight schedule to figure out their inventory levels on a new platform. This led to the company having unstocked shelves in their stores.  
Target eventually figured out that supply chain data that dictated the inventory was flawed and the checkout system failed to process transactions properly. This affected the business of Target and derailed their expansion plans in 2013.

Suggested Read: Understanding the Role of Software in Inventory Management

Benefits of Inventory Management Software for Wholesale Distribution

Wholesale distributors can leverage the multitude of features available with Inventory Management Software to mitigate their business problems. Inventory Management Software can help manage inventory, automate business tasks, maintain omnichannel presence, reduce costs, and much more.

  • Accurate Warehouse Management

Unfortunately, about half of the wholesale companies don’t accurately report their inventory. Considering the impact of unreliable data, it’s quite surprising that employers aren’t keen to find more efficient solutions.

With Inventory Management software, you can consolidate your stocks effectively thus reducing the number of items held. This helps businesses reduce the cost of storage as now they don’t need big warehouses to store all the products, and they can operate with a slim inventory.

  • Reduce Costs

Inventory Management Control Software can easily identify the correct number of items present in the warehouse through which companies can create the plan for re-order. With this cost saving, businesses can invest in new growth opportunities.

Companies will also reduce the need for labor because software takes over much of the work. You can use fewer people to sort through items, count items on a ledger, or prepare a shipment.

  • Automate Tasks

Inventory Management Software offers immense relief and cost-saving opportunities to wholesale distributors. With its automation capabilities, including replenishing fast-selling items, highlighting items that have been in the store for a long period, and more.

Also, gauging the inventory numbers becomes very easy and companies can use the saved resources to run other manual functions.

  • Manage Inventory across Multiple Warehouses

Large businesses and enterprises can benefit tremendously from Inventory Management Software as it allows them to consolidate their multiple warehouses. This ultimately helps reduce their inventory levels and the cost of carrying them.

It also becomes easy to manage multiple warehouse locations as inventory tracking software can be used to manage the stock across multiple locations through a single platform. Further, wholesalers can now gain a deeper insight into their supply chain and take strategic decisions.

  • Seamless Omnichannel Sales

Managing sales across channels can be a frustrating and time-consuming experience without proper management.

For wholesalers, EDI and eCommerce, there are multiple items on sale. And an attempt to manage all the channels manually or through disjointed systems can hamper efficiency and profits. However, an Inventory Management tool can capture omnichannel sales data to reflect the inventory status accordingly.

  • Re-Prioritize Orders in Case of Cancellation or Return

The business landscape is dynamic and ever-changing. The inventory management system should be able to adapt to changing business processes. They should be based on the changing priorities and resources available to the business.

Customers can change or cancel their order anytime or they might come with a custom order. These changes should be easily accounted for, and your workflow needs to adapt accordingly to accommodate the changing need for inventory management system usage. Inventory Management Tools give you that flexibility.

Suggested Read: How Does Inventory Management Help with Stock Controls?


A successful wholesaler relies on robust Inventory Management Software to take care of business functions and warehouse management. The tool helps automate business processes, save costs, and ensure that the supply and demand sides are always in harmony. Does your wholesale distribution have Inventory Management Software?

Related Categories: Inventory Control Software | Warehouse Management Software | Freight Management Software | Delivery Management Software | Transport Management Software | Logistics Management Software

Written by Ashwini Kumar Singh

An experienced Content Developer with a demonstrated history of working in the computer software industry. Skilled in Writing, Content Marketing, SEO, Blogging, and Content Development, he is adding creativity to tech writing. The skills acquired as a Philosophy graduate help him in addressing the pain points of businesses... Read more

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