The Distributor Channel

Nearly 20 years ago a friend made this comment: “(Industrial) customers don’t want to buy electrical products, they want to buy solutions. If you only sell half of the solution, it’s not really a solution-- it’s a bag of parts.” At the time, I was squarely in the center of the electrical automation business. And, like most salespeople, everything I didn’t sell was invisible. On a purely intellectual basis, I realized the PLCs, drives, sensors and motion control systems I sold were connected to something, but emotionally, I didn’t care. I had my bag of tricks and my team was better equipped to assist in project layout, troubleshooting and advanced support than any other electrical distributor and I was fat, dumb and happy. But my eyes were opened. I lost an order.  After the fact, my customer was kind enough to explain the reason why. It seems he felt the mechanical portion of the order was more complex than my fancy sensors. The competitor sold both and during the discussion

Once again, the whole topic of non-competes, non-disclosures have raised their ugly legal heads. A well-known electrical distributor recently appealed a lower court decision and the case is being revisited. Based on estimates from legal experts, the attorney costs alone are most likely pushing $25-30,000 for both sides; and this doesn’t account lost time and wasted energy. I would like to go on record as stating I believe every distributor needs to have and enforce their non-disclosure agreement. In distribution, we don’t have patents, top secret ingredients or other trade secrets. Instead, we have customer contacts, supplier relationships, market price data, a keen understanding of the competitive lay of the land and emerging employees. Some of us invest massively in product training, sales and other job related skills. And, when an employee leaves, we must make absolutely certain that minimal information goes out the door with that former employee. Most think of key emplo

The Challenge – How to Incentivize a Distributor Photo from zazzle.com Purchasing Professional After writing tons of articles on the sales process in distribution where I brutally vilify purchasing and procurement types, I received an email with the following: “Frank, you often make sweeping generalizations about purchasing types. As a former sales guy, I tend to agree with most of what you say. However, my organization (a distributor) has a couple of purchasing people. And while I certainly don’t push them to lie, cheat or steal from our vendors, I would like for them to be more proactive in helping our business make money. Do you have any recommendations for points we should intensify them on? Is it possible for them to do more than just enter orders with our suppliers?” This was a very good question and one I hadn’t thought about for quite some time. There are many purchasing folks working in distribution. These folks are critical to our organization. Most are har