Press Release & Articles
Small Businesses

August 31, 2022

How Retail Supply Chain Management affects growth in the Informal Market
By: Ipinmi Akinkugbe

According to the IMF, the African informal sector contributes over $800 billion to the economy, however, despite the growing activity and commerce, the disconnect and fragmentation and lack of structure is paramount. There are several moving parts in the informal supply chain – suppliers, distributors, manufacturers, logistics providers and retailers and they all work in silos. Independent of one another.

This article is going to delve into the importance of effectively managing a business’ supply chain in the African informal market. We will discuss the challenges faced by small business owners when it comes to retail supply chain management and how each player can optimise their growth by leveraging Sabi’s technology.  

What is a Retail Supply Chain?

A Retail Supply Chain explains the flow of processes involved in getting a product from the supplier to the final consumer. It includes numerous players from manufacturing, supply, logistics, inventory management to retail.  

What is Retail Supply Chain Management?

Retail Supply Chain Management is the management of the retail supply chain flow. It refers to the effective handling of a business’ inbound and outbound logistics. It is essentially the coordination of logistics activities that get a product to the final consumer.

Why is Retail Supply Chain Management important?

A business is only as good as how well they can deliver a product or service, and the ability to provide a seamless purchase journey for a consumer is only possible when the retail supply chain is effectively managed. Management of the retail supply chain can lead to:  

  1. Lower logistics costs  
  1. Product Variety
  1. Lower chance of stockouts
  1. Customer Trust & Larger demand base  

Let us look at each of these individually.

Lower Logistics Costs  

Logistics costs largely contribute to a business’ operating costs. With the effective management of inbound and outbound logistics, everything else falls in place. There are no direct links between the manufacture and end customer so logistics management ensures timely delivery of inventory from wholesaler to retailer and delivery of products from retailer to customer. Businesses using the Sabi platform get products delivered to them within 24 hours free of charge, this reduces or in some cases, completely eliminates logistics costs.  

Product Variety

Small Businesses operating in the informal sector often source their inventory in person. Going to the market is an extremely tedious and time-consuming activity, it is also cash based and is largely unregulated which leads to varying prices. This can be removed and replaced with Sabi’s wholesale marketplace “MerchBuy” where you can buy a variety of products in bulk.  

Lower Chance of Stockouts  

A “stockout” is when a retailer runs out of inventory for a particular item. This will definitely disappoint customers, however, with proper supply chain management, this can be avoided. The goal is to always meet and anticipate the needs of your customers and with an app like Sabi, you are able to manage your inventory and you are alerted when the inventory of a product is low. This helps you stay on top of any inventory issues.

Consumer Trust & Larger Demand Base  

With fewer stock outs, it ensures you are always able to fulfil the demands of your customers, which builds trust. While 37% of customers often buy from a different retailer in the event of a stockout, 9% will buy nothing at all. This can be avoided with effective supply chain management. In addition, to gaining your customers’ trust, there is an opportunity to have a larger demand base through Sabi. Using the Merchbuy feature on the Sabi app, you can open a storefront through which you can sell your products.  

To Wrap up

The management of a retail supply chain is essential to a business’ lifeblood, without it, there is no room for growth. Sabi’s platform gives access to a whole suite of features that help small businesses grow, from the “MyShop” feature which enables merchants track their sales, manage inventory and manage finances to “Merchbuy”, which allows business owners sell goods and buy in bulk and “Wallet” which can be used for any type of payment.  

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