Inventory Management Basics for Wholesalers

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Smart inventory management is an important ingredient for any business that aspires to success and long-term profitability. For wholesalers who typically need to manage multiple suppliers, multiple customers, and lots of moving parts, it is absolutely essential. Below are some of the most important inventory management considerations for a wholesaler.


Wholesalers often have to move large quantities of various items through their internal inventory system: from when items are delivered from a supplier, to when they are stored in a warehouse, to when they are packed and shipped to the customer. Given the commonly large-scale operations, errors are bound to occur from time to time. Having high visibility over inventory is therefore invaluable for these businesses. It is beneficial to have an inventory system that allows managers to know where each order or shipment is, and allows quick responses to customer requests, errors or other adjustments to an order that need to be made.

Knowledge of Warehouse Constraints

Profitable wholesalers know their own warehouse. Given that inventory holdings costs, such as warehouse rent, staffing, ventilation and security costs to name a few, it is critical that a wholesaler gets the most out of the space available. This means not only filling the given space as effectively as possible, but also strategically placing stock within the space so that frequently ordered items can be accessed more quickly.


Wholesale operations become profitable when they are efficient. Automation is a great way to maximize the efficiency because it cuts down the time needed to make simple decisions, calculations and complete basic processes that would otherwise be done manually. In recent years, technology has made this much cheaper through the use of barcoding and inventory management software.

Customer Relationships

Customer relationships are vital for any wholesaler. At the very least, there should be strong lines of communication between wholesaler and customer, whether they are a retailer, distributor, or another type of business. Generally, the more information that is shared between the wholesaler and the customer, the better the outcome. For example, if the wholesaler has full knowledge of their customer demand forecasts, they can plan their purchases around this. Also, if the customer is aware of any limitations for the wholesaler in acquiring the stock they need, this will help them with their own planning.


Customer relationships are fundamental, but ideally in today’s competitive market place, wholesalers and their customers should have fully integrated inventory management systems. This is now possible through the use of modern inventory management software. Using this software, an order made by the customer can be processed instantly by the wholesaler. The wholesaler can then automatically inform the customer of an accurate timeframe for delivery, or tell them whether their own desired timeframe is achievable.


Another way to maximize inventory efficiency is keeping just the right amount of inventory on hand for your business’ needs. Holding too much inventory means that you will overpay on holding costs, but holding too little risks shortages, which can damage relationships with your customers. There is no way to be sure exactly sure how much inventory you will need. All you can do is make the best possible estimation. Detailed analysis of factors such as market demand and customer needs are critical for this, and once again, inventory management software comes up with the goods here. It may be possible to conduct this analysis on a spreadsheet, but inventory management software that collects information from your operations and processes it into useful displays is more accurate, useful, and convenient.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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