Delivering for Best-in-Class Wholesaler-Distributors
October 18, 2017  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow

Since my last blog post, I’ve had a few conversations with contractors that buy building products from distributors. They’ve yielded insights that resonated with my ongoing research as a Fellow with the NAW Institute for Distribution Excellence. They point to a few questions that all distributors should be asking of their customers as an input to their digital vision and plans for adopting and using digital tools.

Here are three interesting ideas that emerged from my conversations with contractors. Your business may not serve contracts, but if you do, your contractors may have differing viewpoints. My point here is that these conversations were easy. The contractors had something to say and were happy that I asked. They understood what I meant when I asked if their distributors were using digital tools to improve service and support customers. So, I offer these comments as a way to help kick-start your conversations or to dig deeper if you are already engaged:

  • Convenience is over rated. The contractors I spoke with understand that distributors may offer online buying, because they feel a threat from disruptors like Amazon. Online marketplaces offer a convenient buying option, one that is similar to a business buyer’s personal buying experiences. Convenience has value for businesses, but there are other considerations. The owners of small businesses, like contractors, often do the buying for their business, because managing cash flow is essential for their business. Getting a good price from familiar brands in a buy box on an online marketplace might be convenient, but it does not help manage cash flow.
  • It’s all about workflow. Contractors make money by keeping their people working, and optimizing utilization is about managing workflow. The contractors I spoke with had a consistent wish for distributors: Design their online tools to support their projects from concept to proposal, to negotiation, to approval, to worksite deliveries, to completed jobs, and to hauling away scrap. They want one record that carries forward through all phases, provides a reference for getting help and solving problems, enables buying the right product, and on and on. The challenge for distributors is to design digital tools to enable their customers’ business processes, not their own.
  • Talk is not cheap. When I asked the contractors if their preferred distributors had shared their digital visions and asked how a digitally enabled distributor could help a contractor, I heard a consistent response: crickets. And when the contract was of a new generation moving up to run the business, or start their own, the sound of silence was deafening. Markets are becoming more and more competitive at every level of the value chain, and every business is looking for an edge and a partner that can help. Distributors are definitely missing a huge opportunity if they are not actively talking with their customers, but they should go further. They can reach out to their most entrepreneurial customers, the ones that are familiar with digital tools and want to use them, to conceptualize, define and launch digitally enabled services.

As mentioned in my last blog post, You Can’t Beat Amazon by Acting Alone, I’m looking for ideas, stories and unanswered questions about how distributors can compete in the digital age, defend their turf against disruptors like Amazon and offer customers new and innovative services. If anything in this post strikes a chord with you and your business, please reach out to me at mark.dancer@channelvation.com. I welcome a conversation. And, preorder a copy of my electronic research report, CEO Insights on Innovating the Distributor for the Digital Age.

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, President of Channelvation, Inc., is a channel strategist and leading authority on digital transformation. He is also an NAW Institute for Distribution Excellence Fellow. You may reach Mark at mark.dancer@channelvation.com.
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