From Storefront to E-Commerce | Fora Financial Blog
From Storefront to E-Commerce
December 06, 2013

From Storefront to E-Commerce

The e-commerce industry has grown by leaps and bounds in recent years. As this industry continues to grow, so do the wholesalers behind them. Find out how the two industries can work together successfully.

In the last decade, e-commerce and internet retailing have exploded. Many retail businesses are looking to expand beyond their storefront by opening a web store, allowing customers thousands of miles away to purchase their products online. This boom in the e-commerce industry has caused a sharp rise in sales. This has been great for the retailer, but it has created some new challenges for their wholesale distributors, who are desperately trying to keep up with the increase in demand. While the positive benefits of e-commerce sales are obvious, the rise of e-commerce has created an unforeseen problem. With retail sales exceeding expectations, their counterparts, wholesale distributors frequently find themselves strapped for cash and looking for alternative working capital and financing options to fill orders.

With retail sales exceeding expectations, their counterparts, wholesale distributors frequently find themselves strapped for cash and looking for alternative financing options to fill orders

There has been a learning curve for online retailers and wholesale distributors. Both of these industries work closely together as they need each other to survive, but issues have developed. Since the start of the online shopping boom, distributors have been forced to learn the differences between supporting services for high volume web based retailers, which can reach customers all over the world and supplying local retail stores. There are also additional challenges with filling orders of merchandise only offered via web. Distributors are required to keep special inventory on hand for these orders and it often causes compliance issues.

One solution to help manage the balance and communication between your e-commerce store and wholesale distributor starts with having an understanding of the major differences between your web-store and local storefront. Supporting the distribution requirements for your online store is going to differ from a storefront location. Outsourcing your e-commerce orders to a third-party logistics company may be one viable solution in supporting distribution requirements. Another solution is to install your own dedicated inventory management system to track orders. Needless to say, having a clear strategy of how your distributors will support your infrastructure during a growth period is something every business should keep in mind before expanding into new frontiers.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].
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