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AmazonSupply – How Has it Affected Your Business in the Industrial, Construction Markets?

by | Mar 27, 2013 | Marketing Trends, Traditional Marketing

gorilla

With an 800 lb. gorilla like Amazon, once they come into your playground, things will certainly have to change. Big online giants are not new to this market. We’re used to the Grainger, McMaster Carr and MSC’s of the world. The difference in my mind is that while price is important to them, they are selling more of a convenience. The Amazon model is a bit different and price points are more critical.

AmazonSupply has been up and running for about a year now. I wrote a post last summer and asked how they might be influencing your business. Back then it might have been too early to tell. (I sure would like your input now.) I assume many manufacturers are using them as another outlet for their products. The trends are indicating that the traditional distribution models are declining.

I recently read an article by Scott Benfield in Industrial Supply, Trials and Tribulations of Sales Growth in an AmazonSupply World that outlined the difference and suggested ways traditional distribution can effectively deal with them. According to Scott, it comes down to the way traditional distribution goes to market. He calls it the bundle approach (full service) as opposed to a transactional model with a much lower cost base.

Sales_growth_Exhibit2

He also recommends strategies moving forward for the “new normal.” In my mind, I’d hate to see the traditional distribution model go away. There’s lots of value in their expertise, but if they are not willing to change, then the future might be dim for some of them.

Manufacturers, what are your thoughts on the different distribution models and where is your sales staff spending their time and efforts? Better yet, what can Associations like ISA do to help their members?

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Looking Forward to 2010

by | Aug 25, 2009 | Marketing Tips, Traditional Marketing

2010Interesting fact about recessions – they end.

In our practice, most of our clients have been hit exceptionally hard in ’09 due primarily to their ties to the construction market. Some have opted to cut spending and ride out the storm. Others have reduced their budgets, but have continued to launch new products and support existing ones. It’s gratifying to see those that continued to promote themselves gained interest, inquiries and sales even in this downturn.

According to Industrial Supply, housing starts were up 2% in July. This was the 5th consecutive increase. Building permits for future projects climbed nearly 8%.You can read the entire USDH report here.

Here’s an interesting fact from some recent research from the Kauffman Foundation – More than half of the Fortune 500 companies were launched in economic downturns. For marketing purposes, if you don’t currently have something in the pipeline, this year is done.

All economic data indicates that the worst is over and we should start seeing an uptick as quickly as the 4th quarter for some industry segments.A recent online survey by StrongMail of 979 business executives in various industries show an optimism about the economy. The survey indicates that 85% are planning to maintain or increase their spending for the remainder of the year. But enough about ’09.

Yes, soon the trend lines will start to go up, but not as sharply as they came down. B-to-B marketers need to look forward and should be starting to crank up their plans for ’10. Inventory levels at distributors are at their lowest levels in years, and manufacturers need to be ready to respond. Spend smartly and monitor what you do. Try something new. If you haven’t added social media to the mix, consider it for ’10. Do something! There are contractors out there buying stuff!

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