Can You Beat Amazon at Their Game?
🕒 5 min read
By Frank Hurtte
The vultures are circling again.
Every few years, the doomsayers resurface: Amazon's eating
distribution. E-commerce is the death of wholesale. Distributors are obsolete.
The headlines are predictable. The advice? Equally predictable and predictably
wrong.
Build your own Amazon. Hire consultants to help you compete
on speed and price. Invest millions in e-commerce platforms. Match their
logistics. Underprice the giants.
If you take that advice, you'll lose. And you'll waste time,
money, and energy doing it.
Here's why: You're competing on their battlefield instead of yours.
What Amazon Does Better (And Always Will)
Let's be honest. Amazon, Grainger, Faire, and the newer B2B marketplaces have invested billions in logistics, data, and algorithms. A mid-sized distributor can't match their speed or price. Competing on those terms is like a neighborhood bookstore trying to out-warehouse Barnes & Noble in 1999.
The difference is, you have something Amazon will never have: relationships, context, and real problem-solving.
What Knowledge-Based Distribution Actually Means
Twenty years ago, I coined the term "knowledge-based distribution" to describe what we actually do. It's not moving boxes. It's not managing inventory cheaper than someone else. It's selling expertise with every shipment.
Depending on your line card, this looks like:
- Engineering support and design consultation
- Application troubleshooting and customization
- Integrated solutions pulling from multiple suppliers
- Supply chain optimization and predictive ordering
- Proactive relationship management
- Long-term strategic partnership with customer operations
You work hand-in-hand with your customers on their
production, maintenance, and growth strategies. You understand their business, not just your inventory.
That's not logistics. That's partnership.
And that's what Amazon can't automate, at least not yet, and
not for the complex, high-value sales that drive your margin.
Why Your Real Competitors Aren't Who You Think They Are
Here's what keeps me up at night: It's not Amazon stealing
your small orders. It's your suppliers asking if they should go direct. It's
your customers wondering if they can streamline their supply base. It's your
sales team approaching retirement with no documented process to replace them.
Those are the battles you should be fighting.
Stop Investing in the Wrong Things
Most distributors I talk to are doing one of two things:
1. Building an e-commerce site that costs six figures
and moves maybe 5-10% of their volume
2. Hiring consultants to help them think like Amazon
Both are expensive distractions.
Instead, invest in what actually matters:
1. Document and systematize your value.
You know what you do for customers. They often don't. Stop
assuming a technical buyer will connect the dots. Create a process for
measuring and communicating the financial impact of your solutions. Make it
real. Make it visible. Make it defensible.
2. Build relationships with customer decision-makers.
The CFO signing the checks doesn't care about your product
specs. She cares about cost avoidance, uptime, and risk reduction. Talk to her
in those terms. Your VP of Sales should know the names of your top customers'
finance teams.
3. Capture and scale your sales expertise.
Your best salespeople are gold. And many are ten years from
retirement. A formal sales process isn't boring: it's survival. Document how
your top performers sell. Build a playbook. Train the next generation. (Note: learn HOW to train the next generation. It's a different ballgame, folks!) This
applies even (especially) if you're moving to team-based selling models.
4. Start charging for what you're worth.
You're giving away thousands of dollars in engineering time,
logistics support, and consultation every month. Productize it. Price it. Sell
it. The era of hiding service value in gross margin is over. Smaller margins on
products + intentional service pricing = sustainable business.
5. Show your suppliers why they need you.
Your suppliers are reading the same headlines you are. Some
are wondering if they should skip the middleman. Show them what you actually
do: create demand in new applications, solve problems their direct team can't
reach, provide market intelligence, build loyalty. All of that costs money. You
need margin to justify it.
Yes, You Still Need E-Commerce
I know what you're thinking: There goes Frank saying the internet should be ignored in this situation. I'm
not.
Without a modern website, you're already behind. Electronic ordering,
real-time inventory visibility, mobile access; these are expectations, not
differentiators. Keeping up with technology is necessary.
But here's the distinction: E-commerce is your baseline,
not your strategy.
Your strategy is solving problems that require knowledge,
judgment, and relationships. Your website supports that. It doesn't replace it.
Think of e-commerce like having a phone number. It's
essential. But you don't build a business around having a phone number. You
build a business around what you do when someone calls.
The Distribution Advantage You Already Have
This is the thing the doomsayers miss: You have built-in
advantages that Amazon cannot replicate through technology alone.
You have salespeople who know your customers' operations.
You have technical experts who can design solutions, not just fulfill orders.
You have a local presence and relationships built over years or decades. You have
the ability to say "no" to a deal that doesn't make sense and
"yes" to a customer who needs flexible terms because you understand
their cash flow.
That's valuable and sustainable, the exact opposite of how Amazon operates.
Stop Playing Their Game
Here's my final take: Stop worrying about whether you can
compete on price and logistics. You can't, and trying is a waste of energy.
Instead, ask yourself this: "What does your organization
know that Amazon doesn't? What problems do you solve that require human
judgment?"
Start there, then double down.
That's not playing it safe. That's playing to win. Go be that winner!
Ready to build your knowledge-based advantage? Too many distributors are spinning their wheels on e-commerce instead of leveraging the real competitive edge they already have: people, relationships, and expertise. River Heights Consulting specializes in helping distribution leaders document, scale, and monetize what makes them different. Let's talk about where your organization is investing energy and where you should be. Let's discuss a strategy tailored to your distribution model.
TL;DR
Amazon will always beat you on price and logistics speed.
Stop competing there. Instead, focus on what you actually do better:
relationships, knowledge, problem-solving, and expertise. Systematize your
value, charge for services, build supplier partnerships, and scale your sales
expertise. That's where your sustainable advantage lives.
About the Author
Frank Hurtte is a Founding Partner at River Heights
Consulting, where he helps distributors
stop pretending they're Amazon and
start acting like the expert partners their customers actually need them to be.
When he's not calling out bad distributor strategy, he's challenging sales
leaders to document what their top performers know and build playbooks that
don't put people to sleep. You can find more of Frank's unfiltered takes on
distribution strategy at River Heights Consulting's blog.
If you want a shortcut to understanding where AI fits in distribution, this is a great start.
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