How wholesale and distribution businesses sell
A wholesaler sells in bulk to other businesses, often on account, and mostly to the same customers week after week. Orders are large, margins are thin, and one wrong price or carton count costs real money.
The usual problems for a wholesaler in Kisumu or Eldoret:
- Two price lists, retail and wholesale, and cashiers who apply the wrong one.
- Stock bought in cartons and bales but sometimes sold by the piece, so the count never agrees.
- Dukas and kiosks that buy on credit and pay late, with balances kept in a ledger book.
- A few customers on special terms, some percent above or below the list.
- Orders packed in the store from a handwritten list, with items missed or doubled.
- Stock split between a warehouse and one or more selling points.
Retail and wholesale prices without mistakes
Wave POS holds a retail price and a wholesale price for each item, and you choose in Settings how wholesale applies:
- By quantity. A line moves to the wholesale price once it reaches the item’s wholesale quantity. Set it at 5 for a carton of cooking oil, and five cartons get the wholesale price while one carton does not.
- By switch. The cashier presses F3 to switch the sale to wholesale, and every item takes its wholesale price.
Either way the till prices the sale and records the price each line was sold at. The sales report can group sales into retail and wholesale, so you see what each side of the business brings in. More in wholesale pricing.
For a customer on special terms, set a percentage on their account: plus 3% for one, minus 2% for another. The till applies it to every price whenever that customer is on the sale.
Cartons, bales and crates from one stock count
Packs sell from the single units in stock. Set up a carton of 12 × 1 L cooking oil as a pack of the 1 L bottle: a carton sold takes 12 bottles off, and a bottle sold on its own takes one. Because stock is held in one unit, a stock take or a transfer counts the same thing the till sells. Each pack is a variant with its own barcode and price, so scanning the carton sells the carton.
Credit with limits, and debtors you can see
Wave POS gives each trade customer an account with a credit limit, and the till checks the balance against that limit before a sale goes on account. Customers settle at the till by cash, M-Pesa, bank transfer or cheque, and every sale, return and payment goes into their ledger. A payment recorded by mistake is corrected with a reversal, never deleted.
The debtors report puts each balance into age bands, 0 to 30, 31 to 60, 61 to 90 and over 90 days, beside the customer’s limit. Our guide to managing customer credit covers following up.
A Monday order, worked through
A duka owner from Kondele orders on account:
| Item | Qty | Wholesale price | Line |
|---|---|---|---|
| Maize flour, bale of 12 × 2 kg | 10 | KSh 1,750 | KSh 17,500 |
| Cooking oil, carton of 12 × 1 L | 3 | KSh 3,900 | KSh 11,700 |
| Sugar, bale of 12 × 2 kg | 4 | KSh 3,300 | KSh 13,200 |
| Washing soap, carton of 20 × 1 kg | 2 | KSh 4,200 | KSh 8,400 |
| Water, carton of 24 × 500 ml | 5 | KSh 720 | KSh 3,600 |
The cashier switches the sale to wholesale with F3, so every line takes its wholesale price. The order comes to KSh 54,400. The duka’s limit is KSh 80,000 and it owes KSh 12,000, so KSh 68,000 is available and the sale goes on account. The receipt prints with prices at the counter, and the packers in the store work from a large, unpriced order ticket that comes off a second printer. Stock falls by 120 packets of flour, 36 bottles of oil, 48 packets of sugar, 40 bars of soap and 120 bottles of water.
Purchasing, warehouses and branches
Deliveries from manufacturers start as a draft and, once received, go into stock at cost; each one updates the average cost your margins are measured against. Supplier accounts show what you owe, and creditors ageing shows what is overdue against each supplier’s terms. See purchasing and suppliers.
If your warehouse is apart from the selling floor, set it up as a branch with its own stock. Transfers record what left, what arrived and any shortfall as lost in transit. Each branch has its own prices and tills, and the dashboard shows one branch or all of them together. More on running several branches.