Wholesale distributors
A distributor can tell you what is in the warehouse. Which of it is earning is another matter.
A wholesale distributor doing about $10M a year knows total inventory and total margin, but usually cannot say which stock is earning its keep and which is parked cash, or what it truly costs to serve each customer once picking, delivery, and returns are counted. The purchasing decisions and the pricing decisions are therefore made on instinct.
A distributor holding $2M of stock at an average of two turns instead of three is roughly $650,000 of cash sitting still. That money is not lost, it is committed, which is worse, because it is invisible and it is already spent.
Helps answer: How do we invest money?
The questions a distributor cannot answer today
- Which stock is earning, and which is parked cash?
- Do the discounts by customer size still make sense?
- Is a second warehouse the answer, or faster stock?
- Which spending is buying nothing at all?
- Why do tidy spreadsheets still not add up to a business you can see?
Can’t tell which one is yours? You are not supposed to be able to. That is the point.
What we connect
These are the systems a business like yours already runs on. Nothing here gets replaced. The work is joining what each one knows into one connected picture of how your business works.
- Your inventory system or ERP
- Purchase orders and supplier terms
- Picking and delivery records
- QuickBooks
- Customer price lists
- Freight bills
Named by what they do rather than by brand, because the brand matters less than whether the thing is connected to anything else.
What a wholesale distributor asks before they start
Our ERP already reports inventory turns. What is missing?
- Turns at the company level are an average across everything you stock. The decision you actually make is per line and per supplier, and that is usually the view nobody has.
We are on QuickBooks, not an ERP. Is that a problem?
- It is the normal starting point at this size, and it is not a barrier. QuickBooks holds the money accurately. It simply does not know your pick times, your delivery costs, or your customer service hours.
What is cost to serve and why does it matter?
- It is what a customer costs you beyond the goods: order handling, delivery, returns, and the phone calls. Two customers buying the same volume at the same price can differ enormously once it is counted, which is what makes a discount schedule quietly wrong.
Would we have to change how purchasing works?
- Not at the start. The first job is making the current decisions visible. Changing how they are made is a separate decision, and it is yours.
Who owns what gets built?
- You do, and the data with it. No licence to buy and no long contract.
Everything we have written for wholesale distributors
5 articles, newest first.
How Do We Spend Money? Finding the Spending That Buys Nothing
Why a $12M distributor cannot see the payroll going into work that should not exist, and what it takes to find spending that never arrives as an invoice.
Second Warehouse or Faster Stock: How a Distributor Decides Whether to Buy Space
Why a $13M distributor cannot tell whether it is out of space or full of dead stock, and what to check before signing a lease on a second building.
Pricing Tiers by Customer Size: Do a Distributor's Discounts Still Make Sense?
Why an $11M wholesale distributor cannot say if its volume discounts still hold, and what cost to serve per account would show about the biggest customers.
Inventory Turns for a Wholesale Distributor: Which Stock Is Earning and Which Is Parked Cash
Why a $12M wholesale distributor cannot tell which stock is earning and which is parked cash, and what the next dollar should buy instead.
Tidy Spreadsheets Aren't a Business You Can See
Why a $6M wholesale distributor with tidy spreadsheets still cannot answer simple questions, and what connecting the data would take.
The same problem in other trades
The systems change. The gap between what the field knows and what the books know does not.
Pick the three leaks you recognize. We’ll tell you what they typically cost a business your size, in dollars.
Pick the three you recognize. We’ll come back with what they cost, in dollars. No sales call, no sequence.
Would rather just talk? Text us, hello@ondework.com, or the contact form.