Does the downturn leave you thinking you have to scale the Alps for a come back? Maybe and then maybe not!
Change is in the air both at inventory levels and the way product is being sold. This is about refining your offering and being very productive at the same time. Making it easy for people to buy from you and dealing out superior customer service.
There is no doubt that some manufacturers and distributors will emerge stronger and possibly more dominant. Then there will be others that weaken and close their doors. But this recession is unlike any we have witnessed before. It may take years to get back to 2007 levels for many. The new “NEW economy” will cause many to look for efficiencies in the form of productivity and changing ways to sell product.
Companies that heeded the call for back and front office productivity during the ‘good times’ are fairing much better than those that didn’t. Business models are changing right before your eyes. You don’t have to look far to see that some of your customers are buying more products online…even if they have to wait 24 hours for product delivery.
Some brick and mortar companies are being forced to retreat from physical locations because they can’t cover the overhead with current sales. Many leave skeleton sales forces and far away inventory locations, as they retreat from their market presence. Face to face competition appears to go away. Or does it?
Some companies flying below the radar, modeling themselves after the ‘Amazon’ model, are picking up market share with shipment and performance guidelines that cause product buying patterns and inventory to dramatically shift. Internet sales are increasing.
Companies that over the years have dominated segments are watching with disbelief as customers and distributors buy from very intuitive websites that are richly populated with product information and guarantees that spell out how they will perform. And perform they do! Just take a look around your market place. Talk you your customers.
Efficiencies and productivity is where the action is at for companies that keep a low profile but produce outstanding results. They don’t want to stock run of the mill products where margins are constrained.They would rather force low margin business and inventory over to their competitor.
If you are not one of those highly productive companies that make it easy to purchase from over the Internet then you should you be worried. You could be losing very profitable, high margin business because you can’t compete on the “productivity frontier”.
So one of the questions that you might like to comment on is: When large national or regional companies vacate a market place, are they taking the business with them using the Internet? Or are there other companies selling product into your market place using the Internet?
1 Comment
June 9, 2010 at 2:19 pm
Our company has witnessed the increased competition between Automation Direct and A-B, which by the way has allowed us to take sales from our local A-B distributor.
There are several other companies that we are working with that allows us to compete against the overbearing A-B sales tactics.
The A-B distributors have a long franchise history in our market place, so from a competitive stand point it is good that we can now take some of that business with very reasonable margins and good delivery.
From a Distributor in the Central part of the USA.
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