|
By Ed Rigsbee, CSP (667 Words) The supply chain has changed.
Early in my sales career I learned the stock joke about
sales people; they did the least and got the most. The same joke was told
about the middleman wholesale distributor. Through the 1970s distributors were
rewarded for whom they knew, for getting placement. This was because
distributors could do the job (product placement and fulfillment) better than
most manufacturers. Times were good; distributors were getting fat and happy. During the 1980s the hint of change rustled through the
distribution channel. Manufacturers started asking themselves, "Do we
really need XYZ Distribution?" Most answered, "Yes." But, some
started making different decisions and went direct. I still remember when
B&L went direct on the company for which I was a rep. I hated the
>*#@%^*s. Times were changing and our country was becoming more national
than regional. As the big box category busters came to life, distribution
started to change. Distribution sacred cows went to the slaughterhouses
because both manufacturers and users realized they had more choice than ever
before. As competition form offshore sources, global alliances
and local partnering became apparent, many distributors were figuratively
caught with their pants down. Many "fat and happy" distributors were
enjoying the life, but not reinvesting in their business. Manufacturers were
looking at world class manufacturing techniques but few distributors were
doing the same in their area of the distribution channel. What does my little
history lesson have to do with your life? Plenty! Over the last half decade I've researched and delivered
alliance seminars to many distribution industry niches. The common thread I
have seen is a general reluctance of distributors to invest in their own
business. There are several reasons but it really doesn't matter. In the end,
if you can't do it better than the manufacturer, who needs you? I know, you
say, "What about loyalty?" Well, your manufacturers have been
saying, "XYZ Distribution is not keeping up, we must not be important to
them any more." I realize I'm over simplifying a complex issue, and It's
not as complex as many want to make it. Today, we are in the information age. I no longer have to
get in my car and drive to the local library to get information.
Now, I simply do a few magic clicks of my computer mouse and more
information is available on my computer screen than is in hard copy at my
library. I still need information, but I no longer need the library. Users
still need what you sell, but do they need you? Think hard before you answer
the question. If you are not adding value, they really do not need you. My primary market as a keynote speaker is trade and professional associations. For associations wishing to survive, I continually tell them that they better deliver value. They must deliver more perceived value to each member than the members are spending on their membership. People have more choices than ever before. People will migrate to where they believe they are getting the best value for their money. As a distributor you must be clear on this idea. What are you doing to deliver value? Really now? Are you
sure those services deliver value? How do you know they deliver value? Who have
you asked? Have you discussed value with your manufacturers? How about with your
customers? In "Developing Strategic Alliances" I included a value
update form. If you have not yet had time to read the book, here is the basic
idea: Write down on separate sheets of paper the value you are getting from the
relationship with each of your manufacturers and then the value you think they
are receiving from working with you. Have them do the same thing, then switch.
What an eye opener. Use the same idea with each of your customers. Now you will
get a glimpse of what your manufacturers and customers consider as valuable. Now
you can really do something about adding value to your distribution channel. Copyright
© 2008, Ed Rigsbee ########### Ed Rigsbee, CSP is the author of PartnerShift, Developing Strategic Alliances and The Art of Partnering. Rigsbee has over 1,500 published articles to his credit and is a regular keynote presenter at corporate and trade association conferences across North America. |
