How online wholesale marketplaces can create positive disruption in traditional retail

In the B2C segment, there has been a considerable shift in buying behavior across markets and buyer segments across India.
How online wholesale marketplaces can create positive disruption in traditional retail

Traditionally wholesale B2B businesses has largely between known parties who had inherited businesses on both the buy and sell side.  Today, various factors like absence of large national players, broken  distribution chain, cost involved in setting up of sales team across the country, payment safety issues are  plaguing the distribution system in the country. As a result transactions largely happen face to face between the buyer and the seller and between known parties, who have had long standing relationships.

Ecommerce as we all know is a great leveler. Online marketplace enables sellers or businesses to directly offer their products/services to masses across the globe. Access to a large target audience base across geographies and demographies opens up a vast sea of opportunities. Before the advent of  smartphones and the internet, this was not possible. In the B2C segment, there has been a considerable shift in buying behavior across markets and buyer segments across India. This is surely going to impact the way B2B business is  conducted, s as  all traders have been   consumers at some level. These traders thereby have been able to experience the benefits of choice and price comparison that the internet offers.

The timing is just right for players like Wydr Wholesale to tap  the unmet needs of the new age retailers. Let us try to understand what  typical problems  do the retailers face in the traditional business model and how online wholesale marketplace can offer solutions:

Discovery: Access to new sellers across geographies

  • Need - A retailer in tier 2 or tier 3 towns does not have access to the top wholesalers, best product and best pricing. He is dependent on middlemen who tightly guard their sources. Similarly, a wholesaler sitting in a wholesale hub does not have the resources and bandwidth to directly connect with buyers.

  • Solution - Platforms like Wydr offers  benefit of mutual discovery of buyers and sellers along with the benefit of end-to-end ecommerce. A retailer sitting in Delhi can now easily find hosiery products manufactuered in Ludhiana or Tirupur and source directly. Then, there are online directory listing websites too, which many buyers and sellers have used to their advantage for discovery of buyers. But, these platforms do not provide transaction support.

  • Payment solution : Risk free transactions

  • Problem - In traditional distribution environment collection of payments from buyers in distant geographies has always been a challenge.  Even today this is probably the single biggest hurdle to business expansion. Or for that matter, even a buyer is hesitant to do business with a new seller if he has to make upfront payment, thus limiting his sourcing options.

  • Solution - When manufacturers or wholesalers do business through a platform like Wydr, they don’t need to worry about  their payment collection and neither   the buyer has  to worry about making upfront payments and not getting his goods. The technology solution of payment collection and real time view of order movement brings a sense of relief to the buyer and seller. . Sellers are now more open to selling to retailers in markets beyond a certain geographical area or to retailers with whom they have not had business dealing before.

Data led decisions

  • Problem - In the traditional world, a shopkeeper has to make  special efforts to keep himself abreast from the  latest trending products. Visits to a wholesale hub are must if a retailer has to be stay updated.. Even then the decision of  what to purchase largely remains personal. . Retailers typically develop a knack for picking up products that will appeal to their buyers, it means taking the effort of a physical trip to new markets or to a wholesale hub. Wydr met retailers in cities like  Dehradun and Roorkee who expressed dissatisfaction with the choice of merchandise available with the regional wholesaler. They were forced to take time off to visit SadarBazaar , Delhi at least once in a quarter if not monthly to understand what were the new trends, especially in fashion and home décor categories

  • Solution - Technology and online platforms help retailers in a big way. By virtue of collecting real time information from thousands of buyers, such platforms can enable buyers with data on what is actually selling well in the market. Such data can help shopkeepers  make better utilisation of their capital by investing in the right products.

Price Competitiveness:

  • Problem – Unlike the B2C business, there are no fixed prices in the wholesale business. Prices depend upon long term relationships, volumes and buying power of the retailer. But, these prices are largely controlled by the seller.

  • Solution - Platforms like Wydr that hosts bulk sellers from across the country, the retailer has access to the most competitive prices for merchandise. With its buyer seller chat enabled services,  Wydr buyer can actually reach out directly to the seller, negotiate prices based on volumes with  the comfort of his own store. If the retailer has received a product enquiry from his own buyer, he can easily post a query on an app like Wydr and receive quotes directly from sellers and fulfill the needs of his buyer, thereby creating client loyalty and better competitiveness.

Some things are better left to experts

Building technology that works continuously  is not easy. More importantly it is very expensive. Many traditional players have spent a lot of money on building their software through third party vendors. But, much to their chagrin, they realised quickly that managing technology is not their business. Buying and selling of products is their business and which is where they should focus.

Technology led logistics: It’s all real time now.

  • Problem - In the traditional retail business, transportation and logistics is the responsibility of the retailer. He has  to coordinate with the transporter to have his goods picked from the wholesaler. There is  no real time view of goods. There are  no economies of scale.

  • Solution - Technology offers greater convenience to the retailers. Logistics is now completely technology led and buyers/sellers always have real time view of their goods. This significantly reduces anxiety. Moreover, when platforms like Wydr aggregate business across thousands of sellers and buyers, they are able to bring in economies of scale which ultimately benefits the user.

Thus, we can see that Online Wholesale is poised to bring about a  positive disruption to the retail business. A retailer sitting in Chapra region of Bihar who is technology savvy, now has the same access to merchandise that the retailer in a large market like Delhi or Bombay has.

This article has been authored by Devesh Rai, CEO, Founder, Wydr.

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