The Distributor Channel

A couple of weeks ago I published an article called Pricing Professional – The time has come . The piece outlined the need for distributors to consider how they run their business and develop a new position. We hit on why the person who typically handled ‘pricing tasks’ was likely more of an administrator responsible for loading the prices of income purchases rather than a margin building professional. We pushed for distributors to consider the impact of a true pricing process and the qualities of the person best equipped to make the pricing process work. Somewhere along the way, we touched a nerve. Building a pricing process is a viewed as a top secret strategy. While a number of our readers commented, it seems no one wants to go on record with their plans. Here is a sample of the way the emails began: “Hope things are going well. While you'd probably prefer I comment directly on the post I really don't want our competitors to know we're doing this. So feel

A recent article in Industrial Distribution covered a couple of points on salaries.  I thought it was worth sharing. Grads from Texas A&M's Distribution program are getting multiple job offers and that impacts starting salaries : Another top-notch university, Texas A&M, has an outstanding industrial distribution program and on its website points out that every student in its ID program had a job at graduation. Many of those students were offered jobs in sales engineering and sales management. The graduates received an average of three job offers, and the average starting salary was $52,000 with some receiving up to $70,000. The article quotes the Wall Street Journal on sales compensation: S ales reps who peddle technical and scientific products earned a median annual wage of $74,970 in 2012, more than twice the median for all workers, according to the Labor Department. A competitive hiring market for science and tech workers is part of the reason, but employers al

Buzz words bug me. A decade or so ago everybody suddenly became a “value-added" sort of guy. Every salesperson I talked with for more than 20 seconds managed to find a new place to insert the words “value-add," yet most couldn’t define the value they were adding. Even fewer had any idea as to the worth of their “value” to the customer. And, only one in every thousand could manage to prove their value in dollars and cents. Long ago we suggested a break from the whole value-added selling hyperbole and laid out a plan for value-metric selling. You can read what I said back in 2011 here .  Value-metric selling added definition and focus to the extra services distributors provided along with their products. We suggested then and still believe providing services or some other value to the customer equation without thinking (or at least considering): • Does the customer even want the service? • Does the customer place any value on the service? • Is the value the cust

Over the past decade, modern distributors have implemented massive organizational change. Most were driven by customer needs and market demands while a few others were based on shifts in the behavior of our supply partners. But, I believe the time has come for us to consider our own needs. The time has come to build a position which benefits the shareholders of the wholesaler. For the next few moments, let’s review some of the new positions and faces around most distributors. Enter the Professional Salesperson Based on any objective view, salespeople have become more professional. Rather than the back-slapping, good ole boy relationship builders of our fathers’ day, salespeople are positioned to add measurable customer-focused value. Instead of carrying stacks of catalogs and the latest jokes, today’s sellers bring technical know-how and professional problem solving skills. Distributor sellers manage their calendars better, orchestrate teams of support people and often und

Many of the readers of this group are involved in the sales of automation and machine guarding products. At times we all get wrapped up in setting goals, driving results and the business side of our work. But, I believe we have a higher calling. The things we do make the world a better place by improving efficiency, creating better and cheaper product for the consumer, eliminating tedious/back breaking labor and making the work place safer. We are the very small percentage of the population that understands how dangerous an improperly controlled or unguarded robot can be. Further, we understand the technologies available to minimize accidents. We often encounter those who see robotics and machine guarding as a government sponsored nuisance without real value. Occasionally, we see maintenance technicians and engineers disable safety equipment to expedite their work. It’s easy to lose heart and become calloused to the world around us. But, we have a mission greater than just

A quick review of the Profit Reports generated by several knowledge-based distributor associations reveals a few undeniable facts: • Distributors sell thousands of SKUs • Distributors sell to thousands of customers • This equates to millions of customer/product combinations Another point dwells just below the surface. While it is harder to spot without lining up the reports over long period of time, our research indicates the typical distributor discounts more when times are good than when they are bad. You would think that margins would go down in tough times and up in good times, but the preliminary results indicate just the opposite. Perhaps times of economic growth cause us to loosen up our grip on pricing mechanisms. Maybe we get just a little sloppy. Or, perhaps our customers rev-up their negotiating strategies. Still, we find ourselves discounting. As we say here in Iowa, " let’s put some lipstick on this pig ."  Our customers don’t think poorly of us b