Industry in focus: Australian wholesale - Managing supply chain disruption, rising costs and changing demand
From currency swings to weaker consumer demand, Australian wholesalers are navigating a more volatile trading environment. We examine five key challenges shaping the sector, and the financial strategies helping wholesalers stay competitive.
- Australian wholesalers are facing rising costs, currency volatility and supply chain disruption.
- Global trade instability is increasing inventory costs and planning complexity.
- Softer consumer spending is reducing retail demand, impacting wholesale order volumes.
- Late payments are tightening liquidity and extending the cash conversion cycle.
- Working capital finance can help wholesalers smooth cash flow and maintain supply chain continuity.
Australian wholesalers play a critical role in connecting global supply chains with domestic retailers and businesses. But a more volatile operating environment is reshaping how wholesalers manage inventory, pricing and cash flow.
From currency volatility to slowing retail demand, pressure on wholesalers is increasing, making planning and working capital management more complex.
This guide explores the five biggest challenges facing the Australian wholesale sector in 2026 and the financial strategies helping businesses stay competitive.
At a glance:
Global geopolitical tensions are increasing volatility in the Australian dollar
The AUD is highly sensitive to global forces, including interest rates, commodity prices and capital flows
Currency fluctuations can quickly increase import costs and compress margins for wholesalers
The Australian dollar was volatile even before the latest conflict in the Middle East. For Australian wholesalers engaged in international trade, there is increasing uncertainty around purchasing costs and financial planning.
“It should be remembered that the Australian dollar has historically been an inherently volatile currency, said Peter Dragicevich, Currency Strategist (APAC) at Corpay. "Since the mid-1980s float, the Aussie has, on average, traded in a 13-cent calendar year range. And while domestic economic trends have an impact, it is usually global forces such as interest rate differentials, geopolitics, commodity price swings, and capital flows that have larger more enduring impacts.”
“For a business in Australia, particularly one which imports goods, currency volatility is something that can have a meaningful impact on its bottom line. Abrupt changes in FX rates can squeeze already tight profit margins and this can flow on to other areas such as hiring and investment decisions.”
Peter DragicevichCurrency Strategist (APAC), Corpay
As a result, wholesalers are paying closer attention than ever to exchange rate movements when planning inventory purchases. Greater discipline around pricing, purchasing cycles and inventory planning is becoming essential to manage fluctuating import costs.
At a glance:
Global energy prices are increasing inflation risks and keeping interest rate pressures elevated – cited by business leaders as key barriers to performance
Higher borrowing costs are increasing pressure on margins and working capital across the wholesale sector
Protecting margins will require careful cost management and smarter funding decisions
Interest rates are rising again in 2026, with the conflict in Iran sparking fears of global “stagflation”. Ai Group’s Industry Outlook 2026 shows business confidence is strongly negative, with inflation and high interest rates cited as key barriers to performance.
Higher energy prices – exacerbated by the new war in the Middle East – are adding to these pressures. NAB Chief Economist Dr Sally Auld says rising global energy costs could make it harder for central banks to bring inflation under control, increasing the risk that interest rates stay higher for longer.
Because these price pressures are largely driven by global factors outside Australia’s control, they present a tougher challenge for the RBA. “With inflation already above target, new cost pressures are a challenge for the RBA,” Dr Auld said.
For wholesalers, protecting margins will require careful cost management and smarter funding decisions. Analysing product profitability, reviewing customer terms and reducing reliance on high-cost short-term facilities can help manage borrowing costs as interest rates remain elevated.
At a glance:
Softer consumer spending could reduce wholesale order volumes and increase demand volatility
Retailers under margin pressure are cutting forward orders and extending payment terms
Stronger forecasting will be essential for wholesalers to reduce excess inventory risk
Softer consumer spending – driven by inflation and higher interest rates – is flowing through to wholesale order volumes. Cost-of-living pressures continue to shape consumer behaviour and are expected to persist over the next three years, according to KPMG’s Australian Retail Outlook 2026.
With retailers navigating what KPMG describes as a “silent depression” – shrinking margins, rising costs and intensifying competition from ultra-low-price platforms – many are cutting forward orders and extending payment terms. For wholesalers, this means more unpredictable demand and slower stock turnover, increasing the risk of excess inventory and discounting.
Managing weaker demand requires stronger forecasting. Basing orders on confirmed demand rather than optimistic projections can reduce excess stock risk, while diversifying the customer base helps limit exposure to downturns in any single retail segment.
At a glance:
47% of Australian industrial businesses reported supply chain disruptions over the past year
Tariffs, geopolitical tensions and trade disruptions are increasing uncertainty for importers
Longer lead times and supply volatility are complicating inventory planning for wholesalers
Nearly half (47%) of Australian industrial businesses reported supply chain disruptions in 2025. KPMG’s Australian Retail Outlook 2026 notes that “supply chains have never been more susceptible to erratic global threats.”
Tariffs are expected to remain a pressure point, while rising fuel prices and disruptions to key shipping channels are also pushing up trucking, ocean freight and air freight costs and extending shipping lead times.
For wholesalers reliant on imported goods, these disruptions make inventory planning and supplier management more complex. Changes in freight costs, tariffs or delivery schedules can quickly affect product availability and landed costs.
Closer supplier relationships and better supply chain visibility are becoming essential. Argon & Co’s Operations Outlook 2026 found 40% of operations leaders are working more closely with suppliers to reduce disruption risk and optimise costs, while using data to maintain appropriate safety stock.
At a glance:
Late payments remain widespread, with more than half of B2B invoices now overdue in Australia
Businesses are increasingly delaying supplier payments to preserve their own cash buffers
Slower receivables are extending the cash conversion cycle and tightening liquidity for wholesalers
Late payments are increasing pressure on cash flow across Australian supply chains. The majority of Australian companies are experiencing liquidity challenges due to delayed payments, according to the Atradius Payment Practices Barometer 2025, with more than half of invoices now overdue. A survey by CreditorWatch found close to one in five businesses ranked late payments as a top risk to profitability.
Late payments are a global challenge. Research by SAP Taulia found the share of suppliers paid on time fell from 42% to 37% over the past year, suggesting many buyers are preserving cash buffers amid economic uncertainty and shifting working capital pressure onto suppliers.
Slower receivables extend the cash conversion cycle and constrain purchasing capacity. For wholesalers already carrying higher inventory buffers, delayed payments can quickly tighten liquidity. Greater visibility over receivables – including reviewing customer payment history, adjusting credit limits and tightening payment terms – can help reduce exposure to repeat late payers.
In today’s environment of tighter liquidity, volatile demand and ongoing cost pressure, Australian wholesalers need to be more deliberate about how working capital is deployed.
For many wholesalers, the cash flow challenge occurs at both ends of the trading cycle. Cash is required to purchase inventory well before it is sold, while further capital can remain tied up in unpaid customer invoices after the sale.
That is where Trade finance and Invoice finance (also known as debtor finance or receivables finance) can work together. Trade finance can fund inventory and supplier payments without immediately drawing on cash reserves, while invoice or debtor finance can unlock cash tied up in eligible receivables rather than waiting for customers to pay.
Together, they can create a more efficient working capital cycle and give wholesalers greater flexibility to protect margins, maintain liquidity and pursue growth.
For wholesalers, large inventory orders, long lead times and extended customer payment terms can tie up significant amounts of cash.
Trade finance helps address the purchasing side of the cycle by funding supplier payments and allowing wholesalers to preserve internal cash for operating expenses.
Invoice finance addresses the other side. Once goods have been sold and invoices issued, eligible receivables can be converted into working capital sooner rather than waiting for customers to pay.
Using the two facilities together can help wholesalers bridge the gap between paying suppliers and receiving customer payments, creating more consistent access to liquidity throughout the trading cycle.
That flexibility can help businesses continue purchasing stock, meeting operating expenses and fulfilling customer orders even when payment cycles stretch.
With ongoing cost pressure and FX volatility, margin management remains critical.
Trade finance gives wholesalers greater flexibility around supplier payments, creating opportunities to negotiate better pricing, access early payment discounts, increase purchasing power or manage the timing of international payments more effectively.
Invoice finance can complement this strategy by releasing cash tied up in outstanding customer invoices. Instead of relying solely on cash reserves while waiting for customers to pay, wholesalers can bring forward working capital from completed sales.
This can reduce the tension between offering competitive payment terms to customers and securing favourable terms from suppliers.
By managing both supplier payments and customer receivables more effectively, wholesalers can build a stronger working capital position and protect margins without placing unnecessary pressure on cash reserves.
Growth can place significant pressure on cash flow.
A wholesaler may need to purchase substantially more inventory to fulfil a large order or support a new customer, then wait weeks or months after delivery before receiving payment.
Trade finance can provide funding for the inventory required to support that growth, while invoice finance can release working capital once those goods have been sold and invoiced.
The result is a funding structure that can support both sides of growth.
Rather than repeatedly drawing down internal cash as sales increase, wholesalers can use trade finance to support purchasing and debtor finance to unlock funds from their expanding receivables ledger.
This can make it easier to take advantage of bulk purchasing opportunities, accept larger orders, enter new markets and grow sales without placing the same strain on existing cash reserves
The pressures currently facing Australian wholesalers are unlikely to ease quickly. Currency volatility, fragile global supply chains and slowing retail demand are becoming structural features of the wholesale landscape rather than temporary disruptions.
In this environment, access to working capital is a competitive edge. Wholesalers that strengthen liquidity and build greater financial flexibility will be best placed to navigate uncertainty and take advantage of opportunities as they emerge.
Balancing inventory purchases with delayed receivables can quickly create cash flow pressure. Octet provides flexible working capital solutions that help wholesalers stay stocked, support supplier payments and keep operations running smoothly.
An OctetTrade finance facility helps wholesalers fund what they buy. OctetDebtor finance helps them access the cash from what they have already sold.
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Disclaimer: The above article content and comments are our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.