Distribution Company Loans

How to survive and thrive in a changing climate

Thanks to e-commerce and digital innovation, more customers shop online than ever before. Businesses are trying to find new ways to increase their profitability and many are attempting to bridge the gap by eliminating the distribution channel and handling transportation on their own. It is still possible for transport companies to survive and even thrive in the changing climate, but they must be aware of the challenges and be able to overcome them.

Dropping the Link

More manufacturers are developing their own distribution channel instead of relying on outside sources. This eliminates the “middle-man” with the goal of increasing profitability. For transport companies to succeed and remain competitive in this environment, they must lower prices to less than what manufacturers can save in-house. 

The challenge for these distribution companies is how they can cut costs to still make a profit while offering the best prices for manufacturers. However, it’s necessary to redesign the business model to stay competitive.

Providing Exceptional Customer Service

Customers expect improved customer service. They want to be able to receive customized reports, multiple channels for ordering and a complete look at inventory. They expect 24-hour service with tracking for shipments and management of inventory in real-time. Customers also expect a full e-commerce website that is easy to use. 

While all of this sounds reasonable, it is not a cheap fix. Distribution companies must spend money to get updated on processes and solutions. They may need to purchase new technology and programs to remain competitive in this digital society.

Big Players Take Over

Amazon has expanded in the distribution industry, now offering same day delivery in certain areas. Their integration into transportation is expected to increase with more businesses choosing to use their platform to sell products. 

What this means for distribution companies is the need to innovate and streamline to compete with a big name like Amazon. They need to offer something the big giants do not have. Those with the greatest risk are companies that provide goods that are easy to ship and a high margin potential with limited product expertise needed. For instance, distribution companies for auto parts, electronics and general industrial items carry the most risk. 

All hope is not lost even in these areas. To remain competitive, these distribution companies need to offer technical expertise, improved product knowledge and specialized products. It may require more in-depth training or hiring of new employees as well as expanding the product line.

Automation in Operations

Bigger distributors are tackling challenges by automating more aspects of operations to improve efficiency and cut costs. Almost every step in the shipping process can now be automated with more coming in the future. Loading and unloading shipments, quality control and ordering can be handled by robots and automatic programs. Even the actual transport may be automated in the future with autonomous vehicles. High turnover in the transport business and the difficulty in finding qualified employees make it difficult for distribution companies. They must offer raises and other benefits to attract quality talent and keep employees. 

While this may sound plausible for a distributor, they know it requires one thing – a lot of capital. As the business struggles to survive now, they must spend more money to innovate for the future. Alternative financing can help them gain the funds they need to make specific changes and remain competitive.

How to Compete

Even though the outlook can seem dim for many distribution companies, success is still possible for those who plan now. They must streamline processes and find ways to save money. They must remain competitive by embracing new technology. The focus must be on improved customer service and ways they can stand out from the competition. 

One primary change for distribution companies is to look at themselves as more than that. They must go beyond product distribution and provide a core value to manufacturers and end customers. They may need to offer financing and specialized expertise to gain loyal customers.

Financing for Innovation

While this may sound plausible for a distributor, they know it requires one thing – a lot of capital. As the business struggles to survive now, they must spend more money to innovate for the future. Alternative financing can help them gain the funds they need to make specific changes and remain competitive. Alternative lenders make it easier to get the financing necessary for new technology or to expand services. 

Talk to Fast Track Lenders if you need financing to keep your distribution company competitive into the next decade or apply online and get the funds you need in less than 24 hours.

How much are you looking for?

Get the capital your business needs fast and easy.

Get funded in 24 hours with rates as low as 9.99%