Survival in the Face of Amazon: What Distributors Must Do to Win

Written by Mike Marks on Tuesday, 30 July 2019. Posted in Digital Disruption

Survival in the Face of AmazonIt’s 2019 and over 197 million people visit Amazon each month to browse more than 12 million products, according to BigCommerce. The simple fact is that Amazon is here, and distributors must adapt and innovate if they want a seat at that table.

If customers want to buy digitally, distributors need to sell to customers the way customers want to buy. And, if there’s a problem with a transaction online, the B2B customer doesn’t want to have to search through webpages for an answer; they want to touch a person and get it done. That’s protection, as Amazon is not doing that. The good news is that once distributors start thinking about ways they can innovate, they win because they already understand the value of real human interaction.

Rather than be reactive to the threat of Amazon, be proactive. Think about investing in technology and clean product data. Amazon is estimated to be about 10 years ahead of other companies in meeting customers’ purchasing expectations. It’s because they are listening to their customers and adapting their strategies based on that feedback. Because of that, this is what Amazon customers (your customers) expect to find in their purchasing experience:

  • Reliable customer service
  • Competitive pricing
  • Lightning fast shipping
  • Endless selection
  • Optimized product descriptions
  • In-depth product reviews
  • Personalized communication

Distributors often get caught up in an echo chamber that only serves to promote their beliefs about the market, rather than understanding the needs and wants of their customer. It goes further than standard market research. Get out there and talk to your customers. Ask them about their challenges and their goals. Find ways to stay relevant to existing customers and capture new ones.   

Should distributors be afraid of Amazon?

No. They shouldn’t. Distributors need to innovate and grow and sell to customers the way customers want to buy. It’s as simple as that. If you’re complacent, you’re going to be roadkill in the information highway. Not only do companies need to invest in technology, but the entire company needs to become involved in the sales process. Every member of your team has something to offer that can improve the customer’s buying experience, that includes C-suite executives and customer service specialists.

It’s not just about your sales team. It must be about the customer and delivering real value that sticks. Stickiness isn’t about margins and cost; it’s when a distributor offers value-added services such as consignment, vendor-managed inventory, storeroom management, diagnostics and staging, to name a few. That’s how distributors can win.

About the Author

Mike Marks

Mike Marks

Mike Marks co-founded IRCG in April 1987. He began his consulting practice after working in distribution management for more than 20 years. Over the years, his narrow focus in B2B channel-driven markets has created an extensive number of deep executive relationships within virtually every business vertical in construction, industrial, OEM, agricultural, and healthcare.

Mike has led project teams that improve market access by aligning resources to growth opportunities serving manufacturers, dealers, and distributors. Clients have ranged from small privately owned firms to many of the industry’s market share leaders. Ownership structures have included owner-operators, private equity, ESOPs, and publically traded firms. Mike is proud of the teams work and the confidence clients have shown with additional project work.

He has written extensively, and is frequently quoted on many industry issues. He has substantial board experience on both public and private distribution firms. His contributions to the field include serving multiple terms as a Research Fellow with the National Association of Wholesaler-Distributors, permanent faculty at Purdue University’s University of Industrial Distribution, eight years as Graduate Adjunct Faculty in the Industrial Distribution Program at Texas A & M University, and rendering several precedent-setting expert opinions in contract disputes between manufacturers and distributors.

Prior to forming IRCG, Mike held the position of Executive Vice President at Lex Electronics, an $800 million vertically integrated electronics distributor in Stamford, CT. Mike’s path to management in his early career was through increasing responsibilities in sales and sales management. He also completed a tour of duty as a manufacturer’s representative.

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