MYOB FastStart wholesale distribution


20th June, 2022

Virtual distribution: What is it and how does it make distribution easier?

Just as many consumers have become accustomed to purchasing online, so too are many B2B customers looking for smooth, virtual distribution experiences.

Faced with pandemic challenges like shutdowns, work-from-home orders and supply chain disruptions, the distribution industry – not usually known as an innovation leader – has been nudged toward new ways of working.

One previously underused approach is gaining ground: virtual distribution.

What is virtual distribution?

There are two forms of virtual distribution. The first involves selling a digital service instead of an in-person service or physical product, and the second is about selling physical products through virtual channels – like eCommerce platforms, business websites and social media.

Virtual distribution isn’t an all-or-nothing choice – there’s no requirement to shift all your sales online. It’s just one part of a multi-channel approach that helps businesses cast a wider net and reach more customers.

While many distributors were already selling online pre-pandemic, some traditional wholesalers were holding out. Others were using older technology with limited features and little flexibility.

Ongoing challenges for a changing industry

The wholesale and distribution industry were dealing with challenges well before COVID entered the picture.

  • Expanding competition from smaller importers and huge overseas platforms like Amazon
  • Customer demand for a wider range of products and a ‘consumer-like’ experience, similar to shopping online through general retailers
  • Disintermediation broke down the barriers between producer and consumer, cutting out the distribution middleman
  • Digitisation meant that older systems could not keep up with demand

The challenges that came with COVID-19, including shutdowns, staff restrictions and supply chain issues, made life even more difficult for distributors – particularly those without robust digital systems in place.

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Roadblocks to virtual distribution

Faced with pandemic challenges on top of ongoing industry problems, wholesalers and distributors had to look for new income streams – and some are still in this phase. While moving into the virtual space seems like an obvious choice, some businesses are hesitant.

A few traditional wholesale distributors have done things one way for so long that they’re reluctant to try new approaches. Some are concerned about investing in new solutions during a downturn. Others fail to grasp the scale of change in the market – they don’t yet understand that new technology and massive shifts in customer expectations are here to stay.

Countering the negativity

Despite the reluctance of some business owners, the benefits of virtual distribution are clear. Not only does the virtual space represent new sales opportunities, but eCommerce tech can deliver better customer experiences, more efficient sales processes and easier data collection for your business.

Automated efficiency

Unlike traditional distribution methods, which can be labour and time-intensive, online channels are largely automated. Rather than calling a salesperson or sending an email request to check product availability, your customers get a retail-like experience, where they can see in-stock items, click to add items to an online cart and pay immediately. You can also set email notifications to update customers on the progress of their orders, cutting down on complaints or enquiries.

Supporting existing systems

Some distributors are concerned about losing tried-and-true in-person sales methods – but this is another unfounded fear. Virtual distribution doesn’t need to replace traditional methods. It slots into the salesperson’s toolbox and can help your people improve their service. Salespeople can check inventory levels and upcoming orders on the job and give customers immediate, accurate information. Orders are placed through the online channel, speeding up the process. Even better, data gathered through your eCommerce channel can be used to identify and nurture leads, either through traditional outreach or automated targeting.

Done well, virtual distribution becomes one sustainable sales channel among many, connecting you with new customers and driving sales.

READ THIS NEXT: Retail vs wholesale: Which model is right for your business?

Weaving virtual distribution into your systems

Virtual distribution starts with an online sales channel – but that’s not all you need to keep things running smoothly. Your eCommerce platform should be supported by an ERP solution, preferably in the cloud, so you can integrate CRM and inventory information with sales data.

A cloud ERP solution brings all your work together under one virtual roof – finance, sales, marketing, operations and accounts. Because it works in the cloud, all your data and applications are accessible remotely, from home, the office or out on a sales call. For a distribution and wholesale business moving into virtual distribution, it’s a comprehensive option, centralising new processes and offering full visibility across your business.

We know from recent surveys that many B2B operators, just like consumers, are preferring to transact through online channels, and that’s why MYOB offers integrations with eCommerce platforms, both natively, and through our App Marketplace.

A distribution business’s focus should be on marketing, promotion, advertising and selling – not sales administration. Having an eCommerce platform that integrates with ERP, inventory and sales is the key to saving time and gaining an edge on the competition.

As wholesale and distribution emerge from two years of disruption and uncertainty, businesses that have invested not just in sales platforms, but in cloud ERP to back them up, will be at the head of the pack.

MYOB Advanced Manufacturing is the only cloud ERP platform designed specifically for Australian businesses. Find out how it can move your business into the future.