Wholesale distributors have always faced complex challenges due to the nature of their business model — which includes large and diverse product inventories, many trading partners and a reliance on cost-intensive logistics networks. Recently those challenges have become even more complex.
Rising operations costs, including labor and freight price inflation, are squeezing margins that were already thin. Market consolidation is driving fiercer competition. Upstream and downstream volatility makes it harder to match demand precisely with supply, leading to both customer service and inventory issues.