Distributors need strong supplier partners to bring the most value to their customers. Distributor clients are looking for value and timely support. And everyone wants the best price. Distributor businesses need to be more competitive than ever considering the threat of disintermediation (ex., Amazon). The 2 essential investments for companies in the distribution business today are technology and knowledgeable and experienced sales team.
Technology seems to be the answer for many for so many business challenges. In distribution it is key. If you are not investing in a technology solution to run your business, you are making yourself less competitive.
When we talk about technology solutions, there are the basics that optimize your accounting, sales data, customer purchasing data, etc. To take technology a step further, consider systems that allows syncing with your manufacturers and your customers. Both of their inventory levels are at your fingertips. Orders can be placed automatically when inventory reaches a certain level. Opportunities to implement pricing changes are easily identified. Another improvement is optimizing your transportation scheduling and costs. Also consider warehouse technology using RF scanners providing much greater visibility, again, at your fingertips. Think about what else you can be selling or value you can be adding once these types of investments are made.
The 2nd essential investment is your sales team. For distributors to compete today and differentiate themselves, you need a strong sales team. With the current economy and the future outlook, there’s never a better time to invest in strengthening your sales team. Nothing beats a knowledgeable and highly experienced salesperson to support your customers. Push back on your suppliers to provide more training. They often have webinars, in-person training, on-site product demos, and more.
The Distribution business has many challenges to become and maintain a world class operation. While technology and sales teams are essential, there are many more impactful areas yet to be discussed.