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5 trends disrupting the traditional wholesale distribution model

Multichannel Distribution Specialists

Integrating Wholesale Distribution alongside In-Store, Online and Machine-to-Machine to let today's multichannel businesses increase efficiency and reduce costs while achieving flexible and agile control of the supply chain.

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Archive for July 2014

Developing economies outstanding opportunities for wholesale distributors with NetSuite cloud-based ERP and online stores powered by SuiteCommerce

28th July 2014

Land of opportunity

The growing middle-class in economies such as China and Brazil is well documented. As the global economy climbs out of recession and we look to where this wave of prosperity is due to hit next, it is clear that Africa is a land of opportunity and offers outstanding growth prospects for wholesale distributors with the right technology in place.

Africa has created 37 million new stable waged jobs over the last decade. If this trend continues it is on course to create another 54 million in the next 10 years. This is dragging economies across the continent up with it, with requirements for everything from infrastructure and utilities to domestic and luxury goods and business services. In Africa there is a growing consumer market. 90 million African households have joined the world’s consuming classes in 10 years.

NetSuite competitive advantage for meeting demand from growing numbers of mid-earners

NetSuite provides wholesale distributors with the competitive advantage to meet demand from the growing middle-classes across the world. NetSuite cloud-based ERP and e-commerce solution enables:

  • Direct to end user sales using e-commerce
  • Support for country & continent distributor relationships and power business processes
  • Support for country & continent retail/e-commerce outlets

Legacy, on-premise ERP applications simply cannot match this capability.

Any time, any place, anywhere: NetSuite from BlueBridge One

The omnichannel shopping experience customers are now demanding to be able to: Shop at any time, from any place, and get it delivered anywhere. BlueBridge One helps customers tailor NetSuite’s business management suite to address specific customer processing requirements. The solution scales effortlessly to provide global reach and offers the flexibility to be able to support most business models.

Click here to visit the McKinsey Global Institute to get insight on markets across the world.

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The roll-out of NetSuite 2014.2 has started

8th July 2014

The roll-out of NetSuite release 2014.2 has started. All customers are expected to be live on the new version by mid-September. Over the next few months we will look at the new features applicable to product and service companies as well as the general features applicable to all Users.

Release 2014.2 promises a number of new features across the board including a revamped cleaner looking User Interface which you will ideally need to familiarise yourself with prior to the upgrade. There will be ample opportunity for you to do this in the form of Release Previews and free on demand training available from the Support tab on your dashboard.

If you are a product distribution company then the following are some of the new enhancements that may be of interest to you:

1. Daily Shipping Detail Report

With release 2014.2 the new Daily Shipping Detail Report will provide an end-of-day shipping report that can be generated on a daily basis to show a summary of all the packages picked up by a driver at any given location.

2. Distribution Resource Planning

The release 2014.2 Distribution Resource Planning will enable you to improve inventory management across locations by creating distribution networks that can trade specific items with each other in response to sudden changes in demand for your products. The system will provide a list of sourcing recommendations for transferring inventory across your locations within the network which should be less costly than having to purchase additional inventory from outside suppliers in order to meet customer delivery deadlines.

3. 3-Way Matching

Currently 3-way matching of the purchase order, the vendor bill and the item receipt effectively only takes place after the payment once you post your variances to the General Ledger. With 2014.2 when a vendor bill is created, the system will automatically match the invoice information to the corresponding purchase order and item receipt, and identify any discrepancies. Then using workflow, bills with discrepancies will carry a pending status and require manager approval for payment processing. The accounts payable department with then be able to effectively perform 3-way matching before releasing Vendor payments.

4. Average Costing Method for Serialized and Lot Numbered Items

Previously NetSuite supported average costing at the item level but not at a serialised or lot numbered level. With release 2014.2 average cost is updated each time items are received into inventory and there is no need to manually track serial and lot numbers to determine cost.

5. Customer Centre

In the current version you are generally limited in terms of customising the standard Customer Centre. With release 2014.4 you will have a lot more flexibility as well as the ability to manage product lists available through the Customer Centre.

6. Shipping to Multiple Addresses

Currently internal Users can apply different shipping addresses to individual sales order line items however web shoppers cannot. In release 2014.2 web shoppers will also be able to select different shipping addresses by line item on checkout as well as choose different shipping methods.

7. Purchase Requisitions

In release 2014.2 you will be able to create a purchase requisition without specifying which vendor will be used.

8. Purchase Contracts

New purchase contracts will enable you to make purchases with negotiated terms more quickly and easily

Next month we will review the general features, available in release 2014.2, applicable to all NetSuite users.

EU VAT Changes 2015

7th July 2014

European Union VAT

As can be seen in the diagram below most countries around the world have some form of VAT (Value Added Tax) system in place.

VAT Enactments Timeline

In the EU all 28 member states act as a single market and share one common VAT system. If you trade in the EU then you should to be aware of some of the more basic rules and compliance requirements that apply. As with most taxation regimes the EU has many rules and exceptions to the rules that you will need to consider. Below, however, we highlight some of the more general VAT guidelines that apply to trade within the EU. If you have already setup the NetSuite International Tax Reporting bundle in your NetSuite account then it will be good to know that most of these guidelines and compliance requirements are automatically accounted for when you process transactions within NetSuite.

VAT on the Sale of Goods

Business to Business

Where ever you ship from is the place of supply for recording and compliance purposes. VAT levied is generally based on the Ship to address. If you are shipping domestically your Standard rate of VAT is applied. If you are shipping cross border within the EU then the Zero rate is applied and VAT is self-assessed by the business customer on “Acquisition” in the member state. To ensure compliance you as the seller must retain evidence the goods left your member state. You must also keep a record the Customer VAT number and the invoice narrative, as well as file the necessary EC Sales List & Intrastat reports.

Business to Consumer

Generally if you as a vendor are shipping goods to B2C customers in another EU member state then your member states standard VAT rate is applied. However this is not the case if you breach the distance selling thresholds requiring separate VAT registration for sales in other EU member states.

VAT on the Supply of Services

Business to Business

Generally B2B services are taxable where the Customer is established. Generally VAT is charged if the vendor has an establishment in the same EU member state as the customer. If the vendor does not have an establishment in the member state VAT is not levied by the vendor but rather is self-assessed by the customer via the reverse charge mechanism. A customer VAT Number is required for invoicing and Intra-community cross border reporting.

Business to Consumer

Generally B2C services are taxable where the EU vendor is established. Except that since 2003 digital and electronic services provided by non-EU vendors have been taxable where the private consumer is resident. With effect from 1 January 2015 this exception will also apply to EU vendors providing digital and electronic services.

Next month we will look at some important changes to EU VAT reporting that will come into effect on 1 January 2015 and the implication to companies trading in the EU.