Purchasing Departments are destroying the World of Good Business… And we can Save the Day Imagine an epic battle. Conjure up a vision of cloven-hooved archfiends dashing the lifeblood of our economy. Think about an ever escalating conflict with carnage scattered back to the 1970s. Visualize a place where one side knowingly operates under false assumptions and poorly conceived ideas skews the direction of whole industries. Am I suffering from a persecution complex? Have I lost my mind? I don’t think so. What’s more, I am about to present some scholarly evidence to support my claim. The claim: Commonly used purchasing practices cause companies to make bad buying decisions. There are tons of articles pointing to price being about number 5 or 6 on most customers' list of priorities. Purchasing agents will wave this stuff around like Old Glory, but I have never bought into the story. Despite all the propaganda to the contrary, experienced salespeople testify; when procu...

Bad advice disguised as a how to compete against Amazon article Vultures circle high overhead.  Stumbling, struggling, maybe even crawling way down below, we see the cadaverous body of the wholesale distributor.  The experts are once again predicting the demise of distribution.  Unless we heed their costly advice, our lifeless corpse of an industry will be served up as carrion caviar.  And the folks at Amazon will dance a merry jig around our tombstone. It’s not too hard to imagine the advice these guys are tossing out.  Spend money on building your own e-commerce site.  Hire them or their company to assist you in growing your very own mini-Amazon.  For our kind of distributor operation, this is a terrible recommendation.  What is our kind of distribution? A few years ago I coined the term “Knowledge-based distribution” to describe our type of business.  In this knowledge-based world, w...

In the world of distribution, people really are our biggest asset. Depending on your line of trade, people costs can range from 60 to 70 percent of the operating spend. When I speak to Distributors involved in acquisitions, the first thing they examine is the list of people involved in the business and their likelihood of “coming along” with the new owners. So not only do people represent our biggest outlay of cash, they are seen by others as our biggest asset. Think about it for a moment, a Distributor without people is really an empty warehouse, a stack of outdated office furniture and a customer list; all of which sell on the open market for much less than a well running distribution business. But there is a problem with the people as an investment picture. If people were our warehouse, the building would be surrounded by tall weeds, the sign would be missing letters and the whole thing would cry for a fresh coat of paint. Think about this. According to the top economis...

Women in Industry- the New Trailblazers I squint my eyes and let my mind wander back to those days spent inside the ivy covered walls of the Illinois Engineering campus.  Drab colors, institutional sanitizer and well-worn army surplus furniture stood against the backdrop of overly caffeinated students hustling, bustling and shuffling off to the next class.  And, those students came from every continent, every culture; literally every walk of life.  Except one thing was missing: women.  Actually, my own graduating class was small, around 50 students.  And, only two of them were female.  That’s a whopping 4 percent.  Now fast forward to interviews, job offers and graduation.  Based on my college experience, it didn’t shock me when I discovered zero female presence in the sales training program of my new employer.  Thinking about the whole thing in today’s terms is mind boggling. A common misconception in the past of women in male ...

It just dawned on me; the way distributors view training is skewed. After observing hundreds of  confabs carrying the “Distributor Sales Meeting” moniker, I would characterize the content as product-centric community bulletin boards with an occasional dash of something else. Here’s my unscientific rundown of content: 49% New Product Introductions Everything you ever wanted to know about some new product. Often these are conducted by Supply-Partner field sales teams with little grasp of the local customer mix, competitive landscape or the sales team’s technical abilities. Only rarely is customer application information discussed. 20% Existing Product Re-Launches We started selling this product a year ago. After limited success, we decided some of the sales team didn’t pay enough attention to the product minutia shared last time. So here we are back with more information, only this time the sales guys ask a little better questions. 15% Delivery/Logistics Issues Tim...

Check out the 67th Survey of Distributor Operations: The Value of The Distributor as compiled and  presented by Industrial Distribution magazine.   Anna Wells delivers a comprehensive review of the results of the annual questionnaire that was sent to nearly 27,000 Industrial Distribution subscribers. In all honesty, I debated this post for a good portion of the day.  And while my assistant cringes any time I want to write a post advertising my newest book or article, it was her idea to post this.  After all, the above information is a great way to get a feel for the Distributor mind and see how you compare. You may be surprised by some of the answers.

I just had a conversation with an old friend; somebody I worked with back in the 70s.  We were both young Turks on the training program of a major manufacturer. Armed with freshly minted engineering degrees and lots of ambition, we felt we were poster children for “manifest destiny” or at least something like that.  Early on we kept in contact, but then life happened.  And now, after all these years, thanks to the good folks at LinkedIn and unusual last names, we reconnected. Did someone say FREE SUPPORT? It turns out we both ended up in distribution.  I asked him to tell me about his business.   Somewhere midway through the description he said, “We are a high service distributor in our market.  We have engineers, highly trained sales people and we provide tons of free support for our customers…” With mass quantities Starbucks caffeine already surging through my veins, my blood pressure did a flip-flop.  My muscles tightened, the fight or f...