Last updated: Perilous economy has distributors rethinking wholesale revenue management

Perilous economy has distributors rethinking wholesale revenue management

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Wholesale distributors are a key linchpin between manufacturers and retailers in the supply chain, but they’re under extreme pressure. In an industry where margins are razor-thin, rising inflation, increased competition, and economic volatility present tremendous challenges.

To weather the storm, distributors are rethinking their approach to wholesale revenue management. They’re shifting away from old, manual processes and spreadsheets to automated systems that can help them drive new revenue sources, reduce costs, and maintain or even grow margins.

The problem with spreadsheets

Excel spreadsheets have long been used to keep track of finances and pricing. But with an enormous amount of data available to analyze markets and meet customer expectations in near real-time, they aren’t a good solution for revenue optimization.

In fact, continuing to use spreadsheets as the main tool for wholesale revenue management tool is a risk to the business.

Revenue management is a critical part of any wholesaler’s success, just as maximizing revenues through proper forecasting and pricing is essential to long-term growth. Relying on spreadsheets and manual data entry increases the risk of human error. Moreover, extracting data from the data warehouse can be cumbersome and time-consuming.

Companies often mistakenly believe that Excel works well enough and are loath to upend the status quo. From their perspective, the manual system isn’t painful enough to make a change.

But by leveraging purpose-built pricing optimization technology, senior executives can gain a competitive advantage to help them achieve their strategic goals.

5 benefits of wholesale revenue management automation

To maximize profitability and reduce risk, distributors need to be able to extract, transform, and analyze data quickly and accurately with minimal cost.

With technology designed specifically for revenue optimization and management, wholesalers can take a strategic look at their revenue, customers, and potential growth opportunities to identify the right go-to market strategies.

Here are five core benefits of a modern wholesale revenue management solution:

  1. Streamline operational processes, enabling more informed strategic decisions.
  2. A single platform provides greater visibility into inventory and customers for better workflow, productivity and efficiency
  3. Increased collaboration. From analysts to the CFO, bringing all of the team together to collaborate on a single platform enables wholesalers to harmonize their strategies.
  4. Maximize revenue by leveraging insights from customer buying behaviors and using analytics to inform decisions related to pricing, promotions, and distribution.
  5. With access to real-time analysis, wholesale businesses can make decisions with confidence that result in more revenue and increased profitability.

With automated revenue management, wholesale distributors have the ability to identify market opportunities quickly and develop strategies to capitalize on them.

Additionally, purpose-built solutions make it possible for wholesalers to analyze white space and identify where excess supply or demand exists.

Keeping up in a volatile market

In the last six months, we’ve seen consumer buying habits change as layoffs grow and inflation hangs on. A revenue management solution can help wholesalers identify key inflection points in the market, such as the skyrocketing cost of eggs or a growing preference for vegan options.

By modernizing their systems, they can more easily track supply and demand, and assist teams in tracking key performance indicators (KPIs) around these issues.

Wholesale distributors also can obtain insights into performance post-event analysis, which allows them to take the necessary steps to further improve returns from future market opportunities. Teams can understand what worked and what didn’t to avoid making the same mistakes in the future, particularly around contract renewals.

From a customer management perspective, wholesalers can use the insights to help their customers understand how they performed across a segment and suggest better offers, leading to more profitable outcomes.

With the right revenue management tools, wholesaler distributors can gain a competitive edge that spreadsheets can’t deliver. In an uncertain economy, these tools provide a way to ensure future growth and maximize revenue and profitability.


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Frequently asked questions (FAQs):

Revenue management is a strategy that involves selling a product of service to the right customer, at the right time and right price. It is often referred to as yield management, which uses advanced data analysis and forecasting techniques to predict demand, optimize product availability, and adjust pricing to maximize revenue growth.

Wholesale revenue management is a strategic business approach that leverages data-driven techniques to predict demand and adjust pricing. The primary objective for manufacturers or wholesale distributors is to optimize revenues, market share, and profitability by managing pricing, discounts, promotions, product mix, inventory, and terms of sale for their wholesale customers.

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