Have you ever heard that ancient Chinese curse: “May you live in interesting times?” Well, it didn’t come from China at all—it was coined by a 1930s British politician. And while a “20th century British curse” doesn’t have the same ring, anyone who has lived through the past five years gets the point.
Unprecedented times can be turbulent and unforgiving, and the recent chaos hit wholesale distributors hard. From the pandemic, to record inflation, to sky-high tariffs, you may find yourself longing for simpler times.
The good news is that if you're still working in wholesale distribution in 2025, you know how to adapt to chaos and instability. You’ve figured out how to reduce costs, boost efficiency, and keep your earnings in the black. Now it’s time to prepare for the second half of this crazy decade.
What can you do to adapt to the latest developments?
Keep scrolling to discover 5 strategies that will help wholesale distributors survive this wild ride.
Strategy #1: Prepare for Leaner Inventory Practices
The tariff policies that went into effect on April 2 (and were paused a week later for every country except China) are impacting distributors and manufacturers in two key ways.
The first (and most obvious) impact is the increased cost of importing goods from China and any other country where the tariffs might eventually stick. The second impact is economic uncertainty, since nobody knows which tariffs will stay or how the market as a whole will react.
This means that both distributors and manufacturers will tighten their purchasing plans rather than stocking up on inventory, which has a ripple effect throughout the supply chain. As a result, we’re likely to see more frequent ordering cycles at smaller volumes.
Just-In-Time (JIT) inventory management practices can help your company run leaner operations. Additionally, it will help ensure you’re not investing in large volumes of inventory at higher prices when those prices might drop soon. Naturally, you’ll want to take a comprehensive look at how this shift in strategy affects the entire supply chain in your industry and plan accordingly.
Both your customers and your vendors will likely start doing things differently, which might mean reevaluating contracts and partnerships. We’ll explore all these changes in greater detail below.
Actionable Steps: Adopt JIT best practices, and expect vendors and suppliers to do the same. Be proactive, ask questions, and invest in forecasting tools and AI-driven analytics to accurately predict inventory and use warehouse space more efficiently.
Strategy #2: Optimize Your Returns Processes
One effect you may see very soon—if you haven’t already—is an increase in returns. Distributors and end users will begin returning excess or slow-moving inventory to maintain cash flow and minimize holding costs. This will have a ripple effect throughout the supply chain, with some wholesalers offloading inventory back to manufacturers.
The B2B returns process is already costly for many distributors, due to its complexity and the inefficiency that comes with the manual processes. Increased return requests can impact your bottom line due to:
- Slow returns that frustrate customers
- Incorrectly applied returns fees and vendor credits
- Communication challenges that lead to rework and impact the customer experience
- Wasted effort from Customer Service reps who could add value in other ways
- Escalated issues that pull employees away from more important tasks
Actionable Steps: Streamline your returns strategy and automate the whole process through a platform like Continuum, which makes it easy to receive, track, and process returns, repairs, and warranties.
Strategy #3: Improve Warehousing and Fleet Operations
As you find yourself operating with leaner inventories, it only makes sense to rethink your warehousing and fleet operations strategy.
You can strategically realign your warehouse layouts, prioritizing the storage of fast-moving items and reducing overhead costs. AI-driven software can help predict inventory demands and guide your warehousing plans. You can also optimize your fleet operations with AI-driven software that helps with things like route planning and general logistics.
Even if the proposed tariffs are permanently lifted tomorrow, your business will continue to benefit from warehouse and fleet optimization in the coming years.
Take Action: Create a plan for warehouse and fleet optimization, using software products that employ AI to forecast inventory and plan shipping routes.
Strategy #4: Reduce Accounts Receivable Disputes
In turbulent economies with high inflation, companies become even more focused on reducing costs. As a result, Accounts Receivable (AR) disputes may escalate, especially when they involve return credits and invoice discrepancies.
One way to reduce those disputes is through digital transformation and optimization, connecting systems to eliminate discrepancies and improve the customer experience. From returns management software to world-class ERPs, software is helping to reduce those AR disputes that impact customer relationships.
A survey from Modern Distribution Management (MDM) found that 71% of distributors plan to increase their investments in new technology in the coming years, which will both improve internal operations and reduce payment disputes.
Take Action: Prioritize digital transformation to integrate systems that will reduce errors and ensure accuracy across the board.
Strategy #5: Foster Customer Loyalty
In today’s economy, purchasing teams will face mounting pressure to diversify suppliers and capture incremental, price-driven savings.
Commoditizing your offerings and competing solely on price is a race to the bottom, so the steps you take to improve the customer experience at all levels will set you apart from the competition, even if someone offers your products at a lower price.
You can improve the customer experience—and shore up customer loyalty—by streamlining operations, minimizing headaches, ensuring efficient delivery, and making it easy to fulfill returns, repairs, and warranty claims. Your customers will also appreciate customer-friendly returns policies that your cheaper competitors refuse to provide.
Take Action: Identify ways to improve the customer experience to keep customers loyal and ensure you’re not competing on price alone, such as optimizing B2B returns policies and processes, reducing logistics and delivery errors, and training Customer Service staff to go above and beyond.
Optimize Returns with Continuum
Today’s economic uncertainties, from inflation to tariffs, mean you’ll need to find creative ways to improve profit margins and carve out a competitive advantage.
One way to do this is through Continuum, the only reverse logistics network on the market that connects customers, manufacturers, finance departments, and warehouses in one system. By automating returns and providing visibility at every stage, you can expedite the process and improve the customer experience.
Want to learn more about Continuum? Book a demo today.
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