5 Lucrative Value-Added Services for Wholesale Distribution and Manufacturing
Over the last five years, B2B commerce has experienced one of the most significant inflection points in its history. Seismic shifts in buying behavior and customer expectations have fundamentally changed the rules of engagement. Omni-channel has been firmly positioned as the new industry standard, forcing wholesale distributors and manufacturers to release the brakes and embrace digital transformation to stay relevant.
Those who get it right are improving their market share by up to 10% a year. Research by McKinsey shows that B2B buyers are typically using an average of 10 channels to conclude a purchase, and 70% of them are prepared to spend as much as $500,000 in a single online purchase. As the Boomers retire from the workforce, the buying power is now firmly vested in Millenials and Gen-Zs, both tech-driven generations who will make supplier selections based on their digital capabilities.
Marketplaces are amping up the competition, muscling in on wholesale distribution market share. Across all verticals, from automotive to electronics, pharmaceuticals to food processing, the unprecedented supply chain disruptions of the last few years have put margins and bottom lines under extreme pressure.
For wholesale distribution and manufacturing, these threats are existential in nature, and surviving in this new arena requires reimagining business models and customer relationships while identifying and successfully capturing new streams of revenue.
In a market as tight as this, every cent counts, and research shows that wholesale distributors and manufacturers who successfully blend digital enablement with a customer-centric strategy that maintains a human touch are growing at double the rate of their competitors.
Now more than ever, a customer-centric strategy involves offering customers more, more often. The choices are no longer “either/or”. Now, it’s “yes/and”.
In this article, we’ll be taking a closer look at five value-added services for wholesale distribution and manufacturing that can help boost revenue, maximize margins, and deliver outstanding customer experiences to future-proof your operation against increased competition.
Yes/and: Value-Add Services as a Strategy for Growth
Implementing value-added services has emerged as a viable way for wholesale distributors and manufacturers to differentiate themselves from competitors while boosting margins and revenue.
While value-added services are most often understood as services like kitting, white-labeling, and pre-assembly, the term also extends to “soft” services and customer experience touchpoints. These either help you capture value directly, through increased revenue, or indirectly, through higher levels of customer service and increased reordering.
Far too often, wholesale distributors and manufacturers are not productizing the high-value services they already offer, which represents a major missed revenue opportunity. This is usually because commoditizing value-added services means additional operational complexity, and requires the right tech and logistics infrastructure to manage successfully.
Existing systems and processes don’t often have the functionality to manage value-add services as SKUs. But, with the right solution, designing and executing a range of value-added services is not as difficult to achieve as one might think.
5 Value-Add Services for Wholesale Distribution and Manufacturing
- Real-Time Order Tracking
Providing real-time order tracking from order placement to delivery boosts customer satisfaction, retention and reordering — all of which translate directly into profit. According to one survey, 88% of customers believe real-time order tracking is important. More than half of B2B customers surveyed by Deloitte indicated that delivery issues would cause them to switch to a different wholesale distribution or manufacturing supplier. Accurate real-time order tracking builds trust and preserves customer relationships.
How It Makes Profit: Increased customer satisfaction, repeat business, and better customer relationships. Customers feel more comfortable placing large orders through online channels.
- Automated Order Updates
The ability to send automated order updates to customers about shipments and delivery statuses provides major efficiency and customer experience gains, while reducing cost-to-serve.
How It Makes Profit: Automated updates reduce the cost of labor associated with manually processing customer queries, manual order updates, and follow-ups. Better labor utilization wins margin elsewhere in the business.
- Intelligent Order Routing
Wholesale distributors and manufacturers can leverage Blue Yonder’s AI capabilities to optimize order routing based on factors such as inventory availability, proximity to distribution centers, and customer preferences.
How It Makes Profit: Faster inventory turns and delivery times turn your business into the supplier of choice and promote repeat orders. Optimized order routing and cost-optimized shipping lowers delivery costs, making every order more profitable.
According to Deloitte, B2B businesses that invest in personalized marketing initiatives and customer experiences are gaining significantly more market share than their counterparts. Almost half of all B2B buyers say they have a better customer experience when content and experiences are personalized to them.
Being able to offer personalized recommendations and solutions at every touchpoint in the order lifecycle drastically increases your opportunities to make a sale.
How It Makes Profit: Personalization enhances cross-selling and upselling capabilities, increases engagement and quality of CX, and also reduces the chances of returns.
- Solution Selling
Research by Deloitte indicates that 85% of sales leaders believe that solution selling will be a core sales capability in the B2B context. This involves leveraging existing resources to offer custom-tailored solutions to meet customers’ unique business needs. From sourcing to staggered site deliveries, customer training, and beyond, solution selling has major revenue potential.
How It Makes Profit: By designing tailored value propositions, you can maximize potential revenue opportunities and productize services you may already be offering for free. The close collaboration that solution selling requires fosters deeper customer relationships, leading to increased retention and bigger spend.
Capture More Revenue With Value-Added Services and Blue Yonder
As margins come under increasing pressure from a host of sector-wide threats, developing a portfolio of value-added services is a mission-critical pivot for wholesale distributors and manufacturers hoping to remain competitive.
With Blue Yonder’s suite of industry-leading order management microservices for the complexity of B2B commerce, you can set up and deliver truly lucrative value-added services to capture every possible revenue stream available to your operation. Composable, augmentative, and infinitely scalable, Blue Yonder gives you the flexibility you need to adapt and thrive in a new B2B era. Speak to a Blue Yonder expert today to find out more.