When it comes to wholesale distributors, they have played a major role over the years with regard to selling products. They are the middlemen who operate between the final consumers and product manufacturers. They also make sure that products successfully reach their destinations. Things are now evolving rapidly in the sector and several retailers and manufacturing companies are now pumping in investments for building their own networks for distribution.
They are now directly looking to offer products to customers without taking the services of any middlemen and this is a global trend of sorts. This has definitely led to a major struggle amongst key distribution companies in Dubai with regard to maintaining profitability and overall market position. Yet, some of the challenges that plague them on a regular basis include the following:
1. Management of Inventory- In case you are planning to get into distribution, you should always have a proper idea of how the whole model works. This basically means the system of keeping a tab on products that come into your storage facility and go out of it. This procedure is vital since you will otherwise not know the stocks that you have left in the warehouse and the sales till a particular date of units. In case you do not know the stock amount that is left, you will be unable to refill stocks of particular items which will cause more delays and frustrate your loyal customers.
2. E-commerce aspects- Several distribution companies UAE and particularly entities who have been present in the sector for more than 10 years, do not really know the nuances of the ecommerce business. The business to business aspect of ecommerce has definitely revolutionized the whole industry. Worldwide, there are several distributors who are striving to build a good online presence.
3. Customer Demands- Distribution companies in UAE face a major challenge in meeting demands of customers. Today’s customers are more well-read and millennial customers are more used to buying things online on their computers or mobile phones. The customer now expects a particular level of service that has to be provided without fail. The customer is now the king without a doubt!
4. Disintermediation- Retailers and manufacturing companies are now steadily de-linking distribution companies from the entire sales equation. They are creating their own distribution networks for direct selling to customers. Both the involved parties are benefiting financially from leaving out the distribution company. The retailer gets items at a lower rate from the manufacturer than the distribution/wholesaler while the manufacturer can now sell items at a much higher rate.