By Jack Keough
Last year I was in the market to hire a professional financial planner. I followed the usual routes by asking friends and neighbors for recommendations and then started calling potential planners.
I learned an interesting fact. There are no rules for financial planners. You can be an insurance agent, broker, attorney, or whatever and still identify yourself as a financial planning specialist.
Unfortunately, it’s not that much different from someone who says he is an electrical distributor. Many general line distributors, for example, call themselves electrical distributors simply because they might carry light bulbs or extension cords.
What really defines you as a true electrical distributor? Sure, you carry electrical products but do you provide the services that accompany those products?
In other words, what types of value added services do you provide? And do your customers understand the “extra” values you bring to the table? All too often distributors give away their expertise because they let the customer focus on the price of the product rather than the total cost. One distributor I know segments the total cost of the product/services he provides in a regular written report to his customer. For example, he breaks out the various times he has made emergency calls, energy audits, etc. and assigns a value to each of those situations.
A distributor’s knowledge is especially important today because electrical distributors, like all industrial distributors, are facing increased competition from e-commerce giants like Amazon Supply.
While it is important, of course, for every distributor and manufacturer to continue expanding and enhancing their e-commerce applications, the onus is on them to provide technical expertise and added value or they will be doing nothing but competing on price.
Having written about distribution for nearly 30 years, I’ve interviewed many consultants and distribution experts who on occasion have predicted the demise of distribution as we’ve come to know it. We started with blanket orders, system contracts, integrated supply, vendor managed inventory, captive distribution, and e-commerce. In fact there was a nationally-known speaker on the convention circuit a few years ago who predicted the end of outside salespeople because, he said, buyers would purchase all their products over the web. That prophesy turned out to be incorrect—outside salespeople have never been more important than they are today.
Yes, some distributors have gone out of business, others have merged or been acquired for a variety of reasons, but electrical distribution has never been stronger. Distributors now are better capitalized, more technologically advanced and are adapting to markets themselves better through tools like social media. And it is not just because of the new and advanced products they’re selling. The distributors that have prospered don’t just sell product, they sell solutions to customer problems.
Distributors who continue to invest in hiring technically astute employees and are willing to invest in training and education will be the ones who will ultimately succeed. The outlook for these “true” distributor specialists has never been brighter.
Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com
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