Distribution's new realities
By John J Keough -- Industrial Distribution, 3/1/1999
IF YOU ASKED A DISTRIBUTOR 10 years ago what functions he performed for his customers the answers undoubtedly would have been: selling product and keeping inventory. Those were the distributor's core competencies. The latest Facing of Forces of Change study, compiled by the ArthurAndersen Co., points out that the wholesaler-distributor's most important function today is still ensuring product availability, but notes that this will become less important in the next five years.
The study notes that panelists say activities surrounding the product rather than those that move or manage the product will rise in importance. Specifically, that means an increase in the importance of providing technical service and product engineering services. It is no secret today that customers are demanding more technical assistance from companies who are supplying them with product.
Milacron Inc., for example, has launched a new e-commerce site that it says will give metalworking businesses a new way of selecting more than 50,000 metalworking products. The company says the site will give customers interactive problem-solving and technical assistance, allowing smaller customers access to products and expertise that will help them choose and apply tools, abrasives and metalworking fluids.
Also, Milacron is launching a new national network of trucks to bring products and services to smaller metalworking shops. Other manufacturers are partnering with Milacron to sell their supplies through this new network.
We've heard from several distributors who are criticizing this new selling approach. Some say this is a direct attack on selling through distribution.
The reality is that there are new ways of reaching customers. Distributors must come to grips with the fact that e-commerce, the 'Net and other methods are changing the traditional way of selling. As we reported last month, Home Depot and Lowe's are setting up ways to conduct online transactions this year.
In some cases, these changes are threatening the traditional distributor. On the other hand, some distributors we've talked to are looking at new opportunities by finding out more about their customer and their customer's customer to increase sales. Customer relationships will always be important. But to succeed in the future, distributors must not rely on the traditional ways of selling product. They must, instead, refocus their businesses to meet the ever-increasing demands of new and potential customers.
There are no other articles related to this article.Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
