The Distributor Channel

Vampires, according to the HBO TV sensation True Blood, are darned hard to kill. Seems like no matter how much sunlight, garlic juice or holy water you throw at them, the evil beasts keep coming at you. The same holds true for the price based buying myth. I want a show of hands, how many times have you heard that pricing ranks somewhere at near the bottom of most buyers (not purchasing departments) top 10 purchasing criteria? A recent study of 1,200 companies making purchases in the technology segment conducted by McKinsey and Company revealed many of them claim price is a driving factor in their buying decision. But, their actions are not consistant with their behavior. Could it be that even customers believe the myth? When McKinsey examined what actually determined how customers rated a vendor’s overall performance, the most important factors were product or service features and the overall sales experience. Here are a couple of additional points to consider. Customers were turned of

Way back in 1994, I had the opportunity to briefly meet with George Gilder, a best selling writer, techno-Utopian intellectual, and Presidential Advisor. Mr. Gilder had just written a book called Life after Television which predicts a future where everyone has the technical capacity to produce and distribute their own TV and radio programs. A couple of weeks ago I met somebody who is bringing this vision to life. Eric Dudas (of Fasteners Clearing House) has created Fully Threaded Radio. Fully Threaded Radio is a bi-weekly radio program devoted to the fastener industry. This hour and a half show is designed to be downloaded to your I-pod or listened to via your computer. If you are part of the fastener industry - I recommend you make this a regular download. And if you are part of another industry, let it be known, it's about time we move the wholesale distribution channel into the 21st Century. And by the way - listen to me on Fully Threaded Radio Episode 9 . I cover two topics: H

It happened again. Actually, it’s happening more often all the time. Last week I sat in on a manufacturer – distributor discussion. During part of the conversation gross margin levels came into the conversation. Guess what? The manufacturer’s sales guy didn’t know the difference between “gross margin” and “mark-up”. After the conversation, I politely (and privately) pointed out the error in his calculation. He thanked me, but then said, “My product offers good profit potential, why get hung up on semantics?” Earlier today, I read an article by an industry expert. Somehow his confusion in the gross margin calculation slipped past his editor. It was a small point - just a few cents difference. So, why the fuss? In my mind, it’s all about vocabulary. We develop vocabulary to describe in a couple of words things that otherwise would take many words to describe. We build benchmarking metrics, business formulas and other important descriptors around these terms. One small mi