Most sales organizations periodically examine their product mix, stocking quantities and core expertise, with an eye toward making choices for the future. Will a new product or service increase profits or add an unwarranted burden to the staff? Will dropping a product or service help the company concentrate on more important lines?

Reasons to bring in a product line abound: a distributor loses a competitive line, wants to increase gross income, or has a key customer insistent on a specific brand. In some cases, where large suppliers buy their smaller competitors to gain market share, distributors of that supplier's products suddenly have the purchased lines available for sale.

With the slow industrial economy stubbornly holding on, many small and specialty distributors find this dilemma — expanding their lines or selling deeper with their core products — critical to their survival. They have more reasons to expand their lines than ever, according to one expert.

Dr. William McCleave is an author and speaker on the dynamics of distribution sales and marketing efforts. He often discusses the plight of small distributors, companies that are in a battle to maintain their core product lines and key customers. Market forces fueled by increasing competition are driving small, specialty distributors either out of business or into different product lines, he says.

When sales companies rethink their strategies for growth, they generally follow one of four scenarios, McCleave says. The scenarios by which distributors try to gain market share or grow gross sales numbers are:

• Selling more of the same products to the original customers
• Selling the same products to different customers
• Selling different products to original customers
• Selling different products to different customers

Generally, distributors discuss a combination of these factors and come to a compromise situation in which they continue to sell their core products but add a service fee or product line, McCleave says.

"To make it work, you have to have the right mix of customers and the right mix of products and services. It's not rocket science, in theory, but it is difficult to create a unique product/service offering," he says.

Problems arise when companies try to be all things to all people, offering to tailor the mix to each customer, he adds. Most distributors cannot spread themselves that thin.

"A compelling question arises: Are there enough customers out there for distributors to share?" McCleave says. "The million dollar answer lies in figuring out which customers are getting stronger and are in a position to buy more, and which are getting weaker, with a probability of reducing their business with you."

Distributors that can expertly do this stand the best chance of growing, year to year. Some distributors are having a better year than they had the year before, McCleave notes. That is because, at least for this finite period of time, they have the right mix of customers buying the right goods, and the distributor remains "the go-to expert" for those items, he adds.

Adding a product line involves far more work than putting it on a line card and holding a training seminar for the sales staff, says Chip Wernig, president of Lane Supply Co., in Denver. Wernig and his staff research customers' needs and assess the general market in his region when considering bringing on a new line.

According to Wernig, his is a traditional distribution business, growing by concentrating on niche products: tapes, abrasives and adhesives. However, many customers moved away or downsized during the last three years, and Lane Supply lost market share.

"We have had to implement a new strategy to complement the markets we're in now and present our current product lines to more people. Many customers have moved to Mexico and China. Our traditional markets and lines are adversely affected."

Understanding the customers' needs in depth and in more than just his company's main products, is vital to growing today, Wernig says. One result of Wernig's research was the decision to take on a janitorial products line. The supplier has a superior product but lacks the means to get its message — and its products — to industrial customers, he says.

"The first principle of selling — face-to-face contact that builds a relationship in order to fulfill needs — will never change. But, many other aspects of selling industrial goods do change. We have had to find new customers through our old ones, and find new lines to offer to both groups."

Using basic, face-to-face sales techniques, Wernig's people are able to dig deeper into product needs elsewhere in the plant and, in some cases, in other locations. In the case of Wernig's new janitorial line, both scenarios are true. He has current customers that need improved wiping and cleaning products, and also is locating customers for those products that Lane Supply has never been able to get into in the past.

Wernig also is working with two safety suppliers, offering skin protection products for the first time through Lane. As it happens, both suppliers have become customers.

"I have a lot of cases where we're reverse marketing into our suppliers. In the past, we didn't use that strategy to our advantage. Now, it's part of the new plan," he says.

Misfires are part of the risk distributors take. As good as a line looks and as deep as the market research appears, some lines simply don't sell well enough, he adds.

"A new line is only as successful as the relationships that can be built with the customer," Wernig explains. "That face-to-face trust is still the only way to get deeper with customers and remain their favorite supplier."

Some distributors are sticking with their specialties and even attempting to specialize further by moving into subcategories of their niches. Two small distributors report that they are sticking to their traditional business plans and their core product niches, while looking for new markets for those items. They add products only to fill out their offering in the category, such as abrasives or cutting tools.

Agent Industrial Supply, Ltd., based in London, Ontario, specializes in coated abrasives, adhesives, cutting tools, industrial brushes and power tools. This small distributor has revenue of $1.7 million, 10 major lines and four employees.

According to president Brad Hyslop, one of the company's priorities is to continue to specialize, working harder to find new customers and to find more sales at current customers' plants. Agent Supply is an abrasives specialist for stainless steel applications, an example of "nicheing down" to ever greater specialization, he says.

"We are becoming more and more specialized. It's a necessity," Hyslop states.

The company continues to stay with its core product groups, although it has seen its share of struggles throughout the economic downturn, he says. Several factors resulting from the poor economy have adversely affected his ability to sell only his core products.

"One of our main struggles is due to buyouts," he says. "One top manufacturer was a one-source supplier for us, and we lost those products — and in most cases, lost the business — when they were bought by competitors."

In its struggle to keep sales numbers up while staying with very specialized lines, Agent Supply is working on a Web site that offers more abrasives information, with direct links to its main line, 3M. The Web also offers ways to cut expenses, a necessity that goes hand-in-hand with finding more sales in a niche market.

"It's obvious that faxing and calling on the phone is more expensive, both for the customer and for us," Hyslop says.

Another abrasives specialist has more lines than Agent Supply, but is working on the same principle: keep core products and expertise while seeking new customers.

The woodworking industry in the Northeast has taken "a serious pounding," according to Don Thomas, vice president of sales at Abrasives & Tools of NH, Inc., in Concord, N.H. This company, an abrasives and cutting tool specialty house, has 40 lines and revenue of $5 million a year. For the last three-plus decades, woodworking companies have been a big part of its customer list.

Although his main abrasive line is 3M, his staff has purchased from other fabricators during the last three years, Thomas says, because abrasives pricing is fiercely competitive. Overseas manufacturers have gained market share, mainly through pricing, for decades, he says. It's the first time in 30 years the company has purchased coated abrasive products from several different manufacturers.

"At major customers, it's all about price. That's an unfortunate reality. We very much want to remain the abrasives specialist for the region, and that takes some compromising," he says.

The company's sales force concentrates on those current customers most likely to be able to increase their buy, Thomas says.

"We've always called on the small- and medium-size shops that buy year after year," he says. "Our strategy has been to spend more time with the people who are always busy. We can't compete with the shops that the MSCs have all wrapped up."

The company recently took on three cutting tool lines because a major supplier bought them. Abrasives & Tools automatically got the lines when Sandvik, Inc., the company's major carbide cutting tool line, last year purchased Titex Tools, Precision Twist Drill and ProtoTyp Taps, all well-known steel and carbide tool lines that Thomas was never able to sell economically.

"Suddenly this year, we have the discounts and inventory to sell the tools throughout our region," Thomas says. "It's really helped a lot. Of course, that is taking on new lines, not working strictly with the lines we've always had."

Mixing and matching tools and capabilities is part of the distributor's mission to better serve customers. No one strategy fits every company or territory. But, as McCleave notes, each must try something different in an industry that continues to struggle against the loss of customers and the influx of competition.