Are Distributors in Trouble? Yes! No! How's that for ambivalence? I recently read an article in USA Today that said e-commerce is the death knell for salespeople. Is this a harbinger for distributors too? I'm reminded of something Mark Twain said years ago: "The rumors of my death have been greatly exaggerated."

I'm also energized by an article I read by a psychiatrist who has studied the impact of technology on humans. We have little to fear about technology replacing salespeople or distributors.

Distributors are nervous these days. Not all distributors, but some. Who? Those who fail to add value. This is especially true for the MRO types that are nothing more than a conduit. If your company is little more than a rest stop for the product on its journey from manufacturer to customer, begin thinking about your next business venture. Your days are numbered. This is reality, not cynicism.

I'm writing this article at 39,000 feet on a return flight from speaking at a national sales meeting for a manufacturer. They sell MRO products 100 percent through industrial distributors. This manufacturer has an informational Web site that gets 1,000 hits per day from industrial buyers globally. This manufacturer is loyal and committed to its distribution network — even to the weak ones.

If your company sells someone else's products and you do little to add value, you're in trouble. Read the tea leaves. If you're nothing more than a satellite warehouse for a manufacturer, beware.

If your company resells someone else's product and you wrap it in layers of value, you'll continue to grow and get stronger. Value added has less to do with your company's size than your attitude and commitment.

MRO distributors who solve problems on plant floors, manage the supply chain efficiently, support their products technically, hold their customers' hands, anticipate needs, deliver proactive service, educate their customers, and add value with their people are on solid footing.

Seventy-six percent of the value added in North America comes from knowledge-based activities. Why? Because there is no commodity in creativity. And there's no traffic jam on the extra mile.

Distributors that add value with their knowledge warm the customer's heart in a special kind of way. Seventy-two percent of plant engineers said they would not shop price if they were convinced that value added services were in place with the supplier. Customers will pay for knowledge. Develop an "S.V.A.T." team (specialized value added technicians) and storm the market.

It's commonly accepted that there is 30 percent fat in the distribution channel. I believe we can extrapolate that 30 percent of distributors fit that profile. That's the bad news. The good news is that those who are committed to the value-added philosophy will not just survive in the new millennium, they will thrive. And they will do it with, in spite of, and because of e-commerce.

Tom Reilly is a professional speaker and author. He can be reached at (636) 537-3360 or via e-mail at valuaddsel@aol.com.