What have you done for me lately?

Added significant value!

BY MIKE MARKOVSKY

Special to The Wholesaler

The internet and its resultant shrinking of the global business world have enhanced access to other markets and sources of supply, heretofore not even under consideration. It has also created significant concern among traditional distributors in many industries. Traditional two-step distribution is being threatened by the idea of “buying direct,” which is the end game for many buyers having a global marketplace mentality. 

Even in areas not yet directly impacted by e-commerce, buyers have become accustomed to having an ability to cut out what they often perceive as a “middle-man”: “I can buy it directly from the manufacturer, with no hassle and it shows up on my doorstep!”

And, in instances where the perceived value being added by the traditional distributor is low, the odds of a customer being willing to step around the distributor increase markedly.

Traditional product manufacturers know that the distributor adds value in a wealth of ways; from advising customers on code and regulatory issues and changes, to staying current on product alternatives and specific application knowledge, to providing expedited service when the buyer is in a time bind and, finally, holding the accounts receivable. However, human nature being what it is, the opportunity always exists to reduce the value added and drive the saved expense to the bottom line. Please remember that the degree to which distributors resist the urge to reduce solid value-adds can be proportional to the degree to which they are not perceived as middle-men!

In my experience, the smart distributor today -- in addition to those other value adds -- maintains a healthy inventory of fast-moving products from his key manufacturers. This particular value-add is good business, because it provides ready access for customers in a hurry, assists many customers in choosing a better quality (sometimes higher margin) product and, let’s face it, there is greater motivation in selling what you can see than in taking orders out of a catalog. Most distributors don’t even have to remind their employees of the need to sell stocked items first, although few pass up the opportunity!

The best days for wholesale distributors are still ahead. That is, if the distributor community comes to realize that your competition isn’t just across town, they may well be on the other side of the globe! That shrinking of the planet may have made a lack of value-adds through traditional distribution readily apparent to buyers, but it also clearly points out the value of those that are provided. So, the best way to combat no-frills, buy-direct operations pumping products into your market is to use your strengths -- things they can’t deliver. Beyond maintaining inventory and those other things mentioned earlier, smart wholesalers maintain displays of appropriate products at their facilities, so customers can understand the differences and specific features of the products being considered. If a picture is worth a thousand words, being able to actually see and touch a product being considered should be worth about a million!

Additionally, you should consider those on-customer-site value-adds that can be provided. Many distributors are becoming involved in an on-site consultative role, taking over tool cribs and assisting employees with selection, fitting, fit testing and training on products they supply. This managed inventory approach adds value to the equation that can’t be matched by distant suppliers.

Being “local” means you know the market, the players and the products that answer local needs. If you make knowledge and a willingness to get into the trenches assisting with selection and training, while also providing ongoing customer service and solid access to high value products, your “deliverable,” you can compete with anyone.

The really good news for traditional distributors is that most specifiers and buyers still want product and application expertise from their vendors. Distributors are in a perfect position to fill that value-added need as consultants, adding value far in excess of simply taking orders. In the end, it’s up to you to decide the degree of value you will add and the balance point to which you are willing to invest in maintaining the integrity of your value to the supply chain.

For information on the full range of Haws drinking fountains and electric water coolers, as well as emergency shower and eyewash products visit www.hawsco.com/gc.

Mike Markovsky is the vice president-marketing at Haws Corporation, located in Sparks, Nev. He can be reached at 775/353-8378 or by e-mailing him at michaelm@hawsco.com. Haws Corporation designs, manufactures and distributes drinking fountains and emergency equipment.