Beyond Your Business Reach?

Good Business Year, But????

Beyond my reach you say? I’ve (We’ve) had a very good year. I’m not bragging mind you, but my company has had a  good  year except maybe with LED’s. What do you mean “Beyond Your Reach?”

Well, David and I compared some general notes about where the next growth market will be in 2015 and beyond. Now  mind you this wasn’t a full blown market research project that we are now ready to launch, but it was “us” collectively  listening to clients and other distributors. Many know that Grainger has been growing their “Internet” market and sales by  leaps and bounds, based on public documents. So, naturally there would be electrical distributors making plans for their  own Internet offering.

 What you currently have

You have your existing customer base and a fairly good idea of what those customers currently buy from you. You know  who rides your credit offering, who over returns product, who returns other distributors’ products, who makes outlandish  demands and etc. You also know who cherry picks your quotes, who burns their fax machine up looking for an “error” to  buy from.  Many distributors have automated their quote process and developed ways to increase the number of line items  ordered. Your outside/inside teams have taught your customer base how to buy the most ‘economical’ way from your  company.

In addition you know your local competitors and who will cut the bottom out of a really large project.

Then there is Grainger who comes along and gets pieces of orders, never offers a full line of products, but in some cases manages to get a portion of what you consider the most profitable aspects of a project could be, sometimes using their private labeled products. To add insult to injury “your customer” goes online and orders from Grainger.

Your Customers

You send sales personnel out to interview “your customer” to find out why they ordered from Grainger. The answer will vary, but “your customer” finds the products they are looking for at Grainger. Your customer may need additional products (perhaps non-electrical) you don’t carry. Hold that thought for a moment.

MRO Customers

Distributors tell us that all of a sudden their MRO contracts are decreasing in size along with off contract orders. When they investigate, Grainger is the culprit in many cases. Not only did Grainger take a piece of the business, but they furnished an electronic catalog with pictures and MSDS sheets and in some instances Grainger has produced a four color hard copy catalog.  Grainger made it real easy for the purchasing entity (“your” customer) to buy from them.

Up until now, most were of the opinion that Grainger was just getting a piece of the business – .a piece of your business – but their sales are increasing at a very noticeable rate. In a simple statement they made Internet ordering and the services they offer very appealing and easy to use.

Farmers, Ranchers, Growers and Pork Belly’s

If you have branches out away from the cities, like maybe where they are drilling for oil and gas, take a drive out there and listen to the farm reports….don’t be surprised if you hear Grainger advertising on the radio and local cable TV. ‘Order on the Internet or call and get the products  that day’…that is the message.

So you have your set of customers….the questions are how do you compete using the Internet to obtain results similar to Grainger?

Is this beyond your business reach?