As we’ve passed the half-way point of 2019, it is time to look forward to 2020 at the trends for wholesale distribution. It doesn’t matter if your business is big or small or somewhere in between, distribution is a fact of life, and the trends can add or subtract from your bottom line.
Let’s look at the top distribution trends of 2020 that your company can anticipate and begin to set policies in place to ensure that you position your company for continued growth in the future.
Trend #1: Companies Will Relocate To Avoid Tariffs
With the institution of tariffs on goods made in China, businesses are going to go elsewhere to get what they need. This is the relocation that will have to happen if companies want to keep selling goods at an affordable price.
By relocating manufacturing hubs, goods can be distributed without the worry of tariffs. So, consumers can expect to see items without the “Made in China” label. As the products are made elsewhere, distribution channels will change, and companies will need to rework their distribution and tracking systems to ensure products are delivered on-time and within budget.
Trend #2: Companies Will Find New Trade Partners
With what was recently a symbiotic business relationship with China, companies in the US now have to find new trade partners. China offered inexpensive labor and quick turnaround.
As companies look for new partners, some will have to adapt quickly to keep product distribution working as efficiently as possible. Finding those partners has not been easy, but 2020 is still several months into the future, and there are several options opening up that companies can take advantage of to improve their global presence.
Developing nations could become the winners in the tariff wars, but manufacturing heavyweights like Taiwan, Japan, and Vietnam are also showing promise due to their established system and trusted reputation.
Developing nations that need financial support to establish their infrastructure could become the go-to places for US companies looking for replacements for Chinese business partners. Developing countries have the workforce and the space to meet the needs of US and Chinese businesses.
Trend #3: Technology Leads The Way
Businesses that want to increase their distribution channels and revenue will continue to benefit from the need for more inventory and distribution management. As companies continue to house their inventory in off-site locations, technology will need to continue to adapt to meet these long-distance needs.
Even companies working in the e-commerce space know the importance of implementing reliable solutions to encounter challenges, and part of that has JDE Managed Services to ensure the entire distribution process are handled without issues along the way.
From automated picking to drop-shipping features, software and apps have to be able to integrate seamlessly and work efficiently for businesses of all sizes.
As companies expand their manufacturing and distribution systems around the world they will need to connect each department to speak with each other for improved efficiencies.
The technology also needs to be able to adapt to the issues with politics, borders, and tariffs. Since the world is a global marketplace, technology needs to be able to address the problems that come with changing political landscapes without bogging down the distribution channels.
Trend #4: Companies Move Away From China
With tariffs raising prices exponentially, smart businesses are turning away from China and finding partnerships in other nations. Business projects of all types between companies in the US and China have stalled as US companies are looking for manufacturing, distributing, and wholesaling elsewhere.
Consumers in the US are accustomed to low prices, so the scramble to keep costs low and supplies high is benefitting companies in Vietnam and other East Asian countries. After decades of working with China, wholesale distribution has had a few kinks in the manufacturing and distribution chains.
To fulfill orders, companies have to become creative since they can no longer turn to China for all of the pieces and parts. Instead, they have to find what they need all over the world. So, employees have to learn how to communicate with a wide variety of cultures and nationalities to get business done.
Trend #5: Business Gets Done Faster
Building business partnerships with Chinese companies took time, but it took one signature to close those relationships and force US businesses to go elsewhere.
Businesses do not have the time to build relationships in the same way that they did with Chinese companies. With the need for quick turnover, a trend and strategy for 2020 involve speed.
Moving To The Beat Of Tomorrow’s Distribution Trends
It might be challenging to replace the speed and consistency of Chinese manufacturers, but US businesses will need to get business done in the same way that Chinese manufacturers built their goods.
Trust needs to be established quickly, agreements need to be made without arguments, and promises need to be kept. Distribution and inventory technology will need to be adjusted rapidly to meet the new needs of the post-tariff climate.