Cutting of Costs through Technology - Paper Example

The advancement of technology in the 21st century is a beneficial trend for wholesalers. Today, many operations have been achieved within the distributing chains and therefore incurring high costs. Over the years, various marketing and distribution websites such as Amazon and eBay have expanded their popularity across the world and therefore reaching the unexplored segments. Such online operators have facilitated helped wholesalers to cut down procurement costs even by half. This discussion highlights how some of the wholesalers have used technological tools to minimize their operation costs.

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Entities in the world today compete in an environment with fast-changing pricing tactics. Moreover, value-based retailers have implemented less-spending strategies to impress highly-informed customer bases. Wholesalers have focused on the value of the items by convincing their customers directly that higher prices are justified because of the great value that is achieved (Akerman, 2018). Although pricing remains the most flexible element in the marketing mix, it is crucial in the production of revenue. Therefore, the growth of technology has seen wholesalers embrace innovation as one of the ways of increasing the value of products and also cutting costs in the market.

Selling and promotion are some of the ways wholesalers have used to cut the costs in the market. Technology has facilitated the availability of information regarding customer needs and competitor strategies. The development of websites has helped wholesalers to track down activities conducted in diverse markets and therefore focusing on the strategies that satisfy retailer and customer needs. In the past, wholesalers could incur losses due to inadequate data about consumer preferences. The expansion of the internet has allowed the wholesalers to increase their accessibility and therefore eliminate costs by selling their products directly to the customers.

Today, many wholesalers have invested in e-sourcing, a practice that allows them to find the most appropriate suppliers after an effective comparison process. E-sourcing ensures that the wholesalers do not rely on the information suppliers provide, but instead assess crucial data on various websites before signing contracts (Nowinski & Kozma, 2017). Also, technology has improved communication between the wholesalers and their suppliers. Technology has facilitated interactions through the development of internet-enabled devices that allow connections in the market. Communication also ensures wholesalers and suppliers make real-time transactions without physical contact and therefore making operations efficient and more fluid than before.

Technology has also fostered the optimization of payment processes by streamlining the storage of payment data and tracking invoices worldwide (Akerman, 2018). Moreover, wholesalers can easily compare charges and help in the building of trust between business partners. Therefore, instead of transferring receipts physically like in the past, the wholesalers and suppliers check electronic invoices and thus saving time and cutting costs.

Social media is one of the most significant technological developments in the 21st century. For a long time, wholesalers have relied on middlemen, who assume the responsibility of acquiring supplier, market, and customer data. However, through social media channels such as Facebook, Twitter, and Instagram, wholesalers obtain first-hand information from the clients regarding quality and price preferences. Besides, wholesalers have created websites through which customers compete for prices through product auctions. Traditionally, every step in the distribution process leads to the addition of costs and therefore increasing the market price for the wholesalers. Such strategies have led to the cutting of expenses through the development of new relationships. Moreover, cutting down these extra costs allows the wholesalers to increase the value of specific products, lower the prices, and therefore achieve higher profits.

References

Akerman, A. (2018). A theory on the role of wholesalers in international trade based on economies of scope. Canadian Journal of Economics/Revue canadienne d'économique, 51(1), 156-185. Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1111/caje.12319

Nowinski, W., & Kozma, M. (2017). How can blockchain technology disrupt the existing business models?. Entrepreneurial Business and Economics Review, 5(3), 173-188. Retrieved from https://www.ceeol.com/search/article-detail?id=569963