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Some things never change

John J. Keough -- Industrial Distribution, 4/1/2002

During a recent industry seminar, the keynote speaker said that distributors today were mainly "order takers." He added that distributors weren't really committed to the manufacturers they represent. A manufacturer in the audience agreed, asked whether distributors were really needed, and then questioned their value and effectiveness.

I don't know why I was so surprised to hear the comments. Some feelings never change. The comments made at that meeting could have been made in 1902 when the first distributor trade association, the Southern Supply and Machinery Dealers Assn., was founded.

At that meeting, distributors (then called jobbers or dealers) complained about manufacturers selling direct. Manufacturers complained about jobbers not promoting their brands enough.

Here's what John Reichman, president of SSMDA, said at the first Triple Supply Convention in 1907: "We are warehousemen and partners who store and distribute your manufactured product ... and place your product in the hands of the user quicker and faster than you could yourself."

He went on to say that the success of one is dependent on the other. That was true then and it's even truer today.

I can't tell you how many times over the years I've heard comments from both sides questioning the value of the other. Several years ago, I was sitting in the office of a vice president of one of the largest manufacturers in the industry, a company that prided itself on its commitment to distribution. This was also during a period in which disputes between manufacturers and distributors were increasing.

He told me if relations continued to deteriorate, he would sell direct and that he could do without distributors if need be. He didn't say how he would — or could — do that.

The distribution system in the U.S. is the best system in the world for moving products from the manufacturer to the end user. Over the years, I've heard many people predict the demise of the distributor because of captive distribution, the Internet, disintermediation, open distribution, buying groups, and the growth of the big boxes and catalog houses. Yet the distributor is still here. And as long as the relationships between manufacturers and distributors grow and solidify, they'll be here for years to come. Count on it.


Author Information
John J. Keough EDITOR/ASSOCIATE PUBLISHER jkeough@cahners.com

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