We are all living in unpredictable economic conditions where people seek to secure themselves in every possible way. A wholesale business is a lucrative enterprise where business owners get to earn considerably large amounts of money from even the smallest unit of sales. When manufacturers produce goods in large quantities, they need to find a way through which these goods can penetrate the market easily and get to the final consumers. This is where the distributors come in. The same is true for the manufacturers of the indomie noodles brand; its distributors are major channels through which the products get to the market.
However, it is relevant to note that; large wholesale distributors of products such as indomie, get to face a lot of challenges in growing their business generally. So, what are the challenges that indomie distributors face? And how can they be averted?
LACK OF EXPERIENCE
Granted, wholesale distribution business may sound like a typical buying and selling routine. This is correct, but not entirely true. Wholesale distributors generally have a lot of tricks up their sleeves which they use to run their business effectively and maximize profits; which may not be easily recognized by an outsider. An example is: All experienced wholesale distributors know how to handle stocks which are about to expire such that they don’t lose their investment. There are quite a lot of things that a wholesale distributor may know which an outsider does not, and so it is imperative that new entrants get to acquire the necessary skills needed to run a wholesale distribution business successfully.
Finding and retaining qualified staff is one of the most challenging tasks involved during establishing any business. Fewer and fewer people have the skills and experience for any particular job, and so it has become pretty hard to train and retain qualified personnel. A lack of skilled and qualified personnel is a likely challenge you may have to face as an indomie distributor in Nigeria. Many potentially great employees struggle with complex systems or become frustrated with the lack of technology. This is especially true for the millennial generation. So you won’t be going overboard by investing in technology that likely workforce would expect. This will empower your employees to excel at their jobs while save time, reducing unnecessary stress and improving satisfaction and engagement in their duties.
In the past few years, distribution professionals have seen their market, products and customers change seemingly overnight. In a world run by iPhones and Amazon, it’s comes as no surprise that today’s customers expect everything faster, cheaper and better. For many newbies in the indomie distribution business; Maintaining customer satisfaction can be very challenging. In this case, the solution is quite clear_ to stay afloat in the competition and firmly establish your distribution base; you need to move with every current market trend and sync with it.
Wholesale distributors have for long occupied a middle man position; between the manufacturers and retailers, and for decades, this has been advantageous; however, this position is being threatened by rising technology. Most retailers resort to wholesale market places online to get in touch directly with manufacturers, cutting you out completely.
Now, while technology has caused this problem; it is also the solution. As an indomie distributor in Nigeria, you can use this to create an online platform or market which will provide a service that retailers can’t get from an otherwise direct dealing with the manufacturer.
For most wholesalers; keeping track of their stock usually poses major conflicts in inventory. The same may likely hold true for a novice in the indomie distribution chain, especially when stock is constantly on the move. There are a number of software which can come in handy to rectify this problem. A software like sageX3 is a real knight in shinny armour and can provide a much more efficient and cost effective tool to managing your inventory. It allows you to track goods in real time, on multiple devices, as it is based in the cloud. By using software, rather than tags, you will save a lot of money, while also making your distribution business a lot easier to manage and control.
BAD ROADS AND COST OF TRANSPORTATION
The Nigerian transportation system does not exactly promote any distribution business whatsoever. Bad roads significantly increase transportation costs for indomie distributors. This is further increased by a lack of organised markets and in its place; fragmented markets, meaning that depending on where your customers or sub – distributors are, the distribution challenges are greatly increased when your sub – distributors are not in a major city and is not easily accessible through major road networks
DEMAND, PLANNING, SALES AND MARKETING
For a start up indomie distributor in Nigeria, closely linked to the lack of information is the challenge that distributors have forecasting their demand and meeting their sales goals. This is also compounded by the lack of market information and an inconsistent marketing strategy that does not allow the product to secure a dominant and secure place in the market. Although this is hardly the case for indomie noodles, yet it could pose a major challenge for a new entrant.
POOR WAREHOUSE MANAGEMENT
Some indomie distributors do not have the appropriate warehouse infrastructure for the business. There can also be a lack of visibility into the market because distributors lack the required information, technology, infrastructure, which makes it difficult for the management to keep proper track of stock levels. Another problem can also be the lack of technical know – how on effectively managing a warehouse.
To be new is a challenge for any new entrant into indomie distribution in Nigeria. At this stage, you have little or no reputation whatsoever in the market. This can be quite challenging for many new entrants. Customers typically don’t trust you at this stage in your business. Here, the solution is quite obvious: take out time to find your space and work on building customer trust and confidence in your business. This is the stage where you basically have to work on establishing budding customer relations with other sub – distributors and customers generally, as its advantage cannot be overemphasized.
Price undercutting is a pricing strategy is a situation in which a product or service is set at a very low price with the intention of driving competitors out of the market or creating barriers to entry for potential newcomers.
This is a major challenge for most new entrants and is done by existing distributors to meet target or for some reasons best known to them.