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While the pick, pack, and ship method of wholesale distribution may seem straightforward, the sector faces a number of particular difficulties that put additional pressure on wholesale distributors to continuously improve their procedures.

The following are the three main challenges in wholesale distribution:

1. Manpower – In order to stay competitive, distributors must always look for efficient ways to distribute merchandise to final retailers while using the least amount of manpower possible. Poor delivery performance might be a result of unsatisfactory pay, which can then impair efficiency and reduce margins.
2. Margin shrinkage- A key factor in determining a company’s overall revenue and profitability is the profit margin. To boost operational efficiency that enables them to attract clients at competitive, wholesale pricing, wholesale distributors and their retailers must work extremely closely together in order to keep up with today’s emerging markets.
3. Money management – A distributor’s supply chain is greatly influenced by retailers making on-time payments. Sadly, every distributor has occasionally experienced the annoyance and unpredictability associated with collections from kirana store merchants. Distributors may now automatically earn their collections thanks to digitization, keeping the supply chain running smoothly despite any retailer delays. Visit SwitchPe if you are a distributor and want to learn more.

These are long-standing problems that affect the entire supply chain. A different perspective that can bring about change is what is needed. With the help of computerized billing and ledger systems, an estimated 1.4 million large and medium-sized stores, out of India’s entire 13 million traditional grocery stores can experience a positive transformation, thereby also increasing the formal economy by around 250%*.

It’s time to incorporate data and technology into every facet of distribution to support and grow small businesses across India!

*Source: Accenture

Birth of an idea

Envisaged by Aye Finance, SwitchPe was born from an urgent need that most small businesses face today. The MSME sector in India boasts more than 63 million enterprises, which contribute to more than 30% of the Indian GDP. And while the impact of this sector is significant, so are the issues that plague shop owners on the ground. The typical MSME customer faces numerous gaps in the supply chain, including a lack of well-defined financial infrastructure, regular scarcity of working capital, and the unwillingness of distributors to extend credit lines.

This got us thinking, how often would a shopkeeper miss out on new customers or lose existing customers because they were out of funds to resupply? Because distributors lost faith in their ability to pay on time? And so, the first seed was sowed. SwitchPe was willed into existence.

What is The Switch?

We offer what small businesses in India need – access to credit lines, instant and seamless connectivity to the best-priced wholesale distributors in town, an ever-increasing variety of products, and most importantly – a chance to grow rapidly and confidently in the transforming Indian marketplace.

SwitchPe provides unsecured, non-collateralized credit lines to kirana store owners in a sleek and modern platform – to connect with the best-priced wholesale distributors – closest to their store. Our intuitive user interface helps kirana store owners explore the marketplace, reach out to distributors, and repay monthly bills (partially or in full), all in a single platform. Additionally, kirana store owners earn cashback on every full repayment!

At SwitchPe, we believe in the great potential of small businesses in India. Our vision is to become India’s leading platform for micro-enterprises to access financial services and manage their businesses efficiently.

Powered by Aye

SwitchPe is powered by Aye Finance, an RBI-registered NBFC. Aye Finance provides working capital loans to micro enterprises and in doing so, creates a transformative social impact. With over 300 branches across 20 states in India, Aye has served well over 420,000 customers. Aye Finance is known for its transparent pricing structure, easy documentation process, and guarantor-less lending.

So, the only question that remains is – are you ready to make The Switch?

In the retail sector, working capital determines a business’s overall capacity for growth. To optimize working capital, any business – be it big or small – needs efficient money management. 

The cash flow of a business (especially for a small business such as a kirana store) is critical in measuring its financial health. This is because, if the business spends more than its earning potential, it will soon find it difficult to procure capital to work with. When it comes to small enterprises, a critical aspect of cash flow is to avoid all significant shortages caused by spending too much.

How to manage money, efficiently

Here are 4 crucial things you should be practicing as a small business owner to stay on top of your finances.

1. Make a budget – Most small business entrepreneurs are unable to sustain their business without a properly prepared budget. Forming and following a budget will encourage you to think carefully about how you spend your money.

Once you have determined your starting budget, make regular comparisons between your actual day-to-day figures and your budget assumptions. Your budgets will start to become accurate over time, and you will be able to manage your money more effectively.

2. Keep track of your deadlines – It is important to stay informed of any due obligations, such as loan payments. If you are aligned with your deadlines, you will surely be able to keep enough money in hand to pay off any dues.

Set reminders to stay on top of deadlines and to prevent missing any important due dates.

3. Track your spending – If you don’t keep track of your spending habits, your bills will start to add up; failing to keep track of your spending patterns can also lead to money misuse and overspending.

To simplify the distributor and consumer management system for your business, use a payment solution, such as SwitchPe.

4. Reinvest your money into the business – As a kirana owner, there are two things you should remember about efficient money management: 1) be sure to save a part of your earnings, and 2) use some of your profits to reinvest in your business.

The main principle behind money management strategies is to keep track of your money, use it to build your business, save some for the future, and set an amount aside for emergencies.

Conclusion

Every year, thousands of small businesses across India shut down because of the lack of proper financial planning. If you want to thrive in this highly competitive industry, you should know how to handle your business effectively and establish strong financial health. SwitchPe is India’s fastest-growing, end-to-end platform for Micro-Enterprises. Powered by Aye Finance, the RBI-registered Non-Banking Financial Company, SwitchPe is positioned to become an innovative and powerful tool to bring small businesses into the new age of commerce. To know more, click here.