Friday, July 16, 2010

The Changing Face of Distribution

Recessions accelerate changes in way we do business. Yesterday, an old friend made the comment that his (distribution) business is doing well, but it just doesn't feel like 2007. Things were good but different. The recession has put a mark on our world.

A few months ago a survey of the sales management teams of industrially oriented distributors revealed that 72% planned to expand their market by adding to their product offerings - Sell more stuff to the same people. This manifests itself in Electrical Wholesalers adding safety products, Industrial Distributors taking on electrical products and Power Transmission Distributors marketing new lines of Automation and Mechatronic technology.

At the same time, distributors are changing their style of business. Case in point two recent events nationally known distributors Kaman Industrial Technologies and Graybar Electric.

Kaman Industrial Technologies, a distributor of industrial parts just announced a sales/marketing collaboration with Predictive Service, a provider of predictive maintenance and engineering services. Kaman, noted more for logistical rather than technical prowess, is pushing into a cutting edge field and providing themselves with opportunities to build stronger customer connections.

Just a couple of months ago Kaman made a similar move by purchasing Automation Technology Specialist - Minarik. Minarik operated 20 highly focused and very technical locations across the US. The combination of logistics and technology expertise is a game changer.

Across the continent, Graybar Electric of Canada just purchased Ontario-based AVAD Industrial Sales. AVAD is a provider of advanced automation and process controls. Regardless of the occassional hype to the contrary, Graybar is primarily a seller of electrical and data-communication commodities (think metal conduit, circuit breakers, wire, and computer communication cable).

What does all this mean?
Well for one thing, those small independent distributors who used technology as their selling niche will need to kick-up their performance a notch or two. We will see a battle royal between distributors protecting their turf and the hoary invader.

And, the distinctions between distributors are breaking down - change is accelerating.

3 comments:

Dinesh Kumar said...

Thanks for sharing this Informative content. Well explained. Got to learn new things from your Blog on SAP SD

Sahana said...

Thanks for sharing this Informative content. Well explained. Got to learn new things from your Blog on SAP

Sahana said...

Thanks for sharing this Informative content. Well explained. Got to learn new things from your Blog on SAP