The competitive landscape of the wholesale distribution industry is fiercer than ever before. With brand-new, internet-based distributors of all sizes seemingly popping up as quickly as mergers and acquisitions are building new distribution powerhouses, the competition just keeps getting more intense. Adding to the mix are an increasing number of manufacturing companies that are selling direct to retailers and offering online shopping options for consumers, bypassing distribution companies entirely. And let’s not forget the impact big box stores and e-tailers can have on the distribution channel as they leverage their purchasing power, large retail networks, and extensive B2C experience.
Of course, no discussion about distribution competition is complete without addressing the elephant in the room, Amazon® Business. With the ability to sell millions of SKUs with flexible shipping options at low price points, Amazon is setting a high bar for customer expectations. Amazon is very good at responding to how buyers buy today by offering a powerful customer experience that uses modern technologies, such as artificial intelligence (A.I.) and data science.
Attempting to face this level of competition might be enough to make some distributors call it quits. But for those distributors who are willing to fight for a piece of the middle of the supply chain, they might find that within the very challenges they are trying to overcome are the opportunities they need to survive and grow.
Compete through collaboration
Amazon did not get to where it is all on its own. It is successful in large part because of the many partnerships it developed. Distributors need to do the
same. They need to build tight relationships with suppliers, logistics providers, dealers, and others in their network in order to make accurate projections, achieve optimal prices, and meet customer delivery demands. This can be achieved with business collaboration tools. With the right tools, distributors can gain full visibility and achieve effective communication that creates a functionally-integrated supply chain ecosystem.
To read more on The New Face Of Competition For Wholesale Distributors, checkout the complete best practices guide.
And, as always, contact ICCG to help provide you with insight and information. Schedule a complimentary consultation to review your questions.