Are you looking to set up a wholesale supplier business? Irrespective of what you’re selling, this is a business model that’s likely to be more complex than you may think, with the majority of new and even established suppliers often struggling with rebates in their business.
For those who are completely new to this area, a rebate in the area of wholesale supplies is an incentive that a supplier may offer to a buyer to meet specific purchase volumes or sales targets. So, suppose you’re a wholesale supplier that ships pet food to pet stores; you may be able to offer pet stores a rebate if they purchase two crates of dry cat food, rather than one crate. This encourages bulk purchasing and also helps you to build a good long-term relationship with your customers. It should also be noted that the rebates are always given back to the buyer after the transaction has taken place; it’s not the safe as BOGOF.
If you’re looking to have a rebate management system or piece of software installed, what do you need to know about it?
It Will Simplify Complex Rebate Structures
Moving up a level, many rebate agreements aren’t as simple as the dry cat food example in the intro. Wholesale suppliers often have to manage and oversee rebate agreements that involve a vast array of tiers, products, and customer segments. Even those who are qualified in bookkeeping might struggle to keep up with all that on paper! By installing rebate management software, you can ensure that tiered rebate structures are managed as they need to be, as well as ensuring that all the calculations are accurate, so you don’t lose money.
Enhances Partner Relationships
Having rebate management software can help the retailers that you work with feel more confident in their transactions with you. You’re not going to randomly change the tier system without oversight (the software) and you’ll also be able to offer the correct rebates to them without delays or processing. This will help to develop the relationships that exist between you and those you sell to, which is likely to build client loyalty and increase repeat business.
Improves Profitability Analysis
Of course, rebate management software also helps you as a wholesaler. It provides detailed insights into how each tier of the rebate system will impact profitability, which will allow you to assess which rebate structures are the most effective per sale, or per item. This will help to maximize returns, keeping your profits up.
Reduces Administrative Burden
As noted earlier, it would be practically impossible to manage rebates manually and, if you did, the chances are, your error rate would go up considerably. All rebate management software allows you to automate this tedious task and reduces the administrative overhead and burden on you and your staff.
Ensures Compliance and Auditability
In business, you need to keep a paper trail for tax season, and, with this kind of software, you’ll have that, creating audits and keeping the IRS happy. Well, as happy as they can be! The software will also ensure compliance with regulations in the area you’re selling in and will also minimize disputes between your company and retailers.
