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tED Magazine To Dig Deeper Into The AmazonSupply Threat

By now you may have checked out the story on Jeff Bezos and AmazonSupply posted on the Forbes Magazine website on May 8th.  If you haven’t, you should check it out.  To be honest, it’s pretty good, but if you follow of us in tED magazine or at www.tedmag.com, the Forbes story doesn’t really cut any new edges on what we have already told you.

The Forbes story says Jeff Bezos doesn’t talk about AmazonSupply or its potential. That’s why we invited Brad Stone, the first journalist allowed inside the Amazon headquarters, to be our featured speaker at the NAED National Meeting in San Francisco just two weeks ago. We also posted three stories about what he saw when he was inside Amazon here at tedmag.com.

The Forbes story also talked about the inventory that AmazonSupply has compared to the average distributor.  Amazon lists about 2.2 million items, which is up from about 500,000 a year ago.  The average distributor has around 50,000.  Again, we have done that story both in tED magazine and online several times.

And the Forbes story explained that the way distributors are trying to stay even with AmazonSupply is through value-added services.  Again, we have probably given you two dozen stories online about the value of value added services, and just three months ago we gave you 7 tips to fight off the online threat in our February issue of tED magazine.

But instead of going into tED magazine’s history of covering this rather large threat to our supply chain, we are going to move forward. We are going to talk with the industry experts so you are prepared to take on this challenge, and you will emerge from it stronger than you are today.

The story in Forbes magazine does one really important thing.  It gives AmazonSupply more credibility.  In fact, a lot of credibility.  It says to the world of distribution, and to the potential investors in Amazon, that this is a real threat to our supply chain.  tED magazine has been saying that for 16 months.

It’s time to do something about it, before it’s too late.

Richard Balaban, who is studying AmazonSupply for a management consulting firm, told Forbes Magazine, “The question is not whether AmazonSupply will be a threat. Rather it is which customers, purchase occasions and categories will be attacked first.”

In simple terms, standing still during that attack will lead to disaster.  In an age when everyone is talking about innovation, the time to innovate is now.

I have spent some time with Dirk Beveridge, the founder of UnLeashWD and the Innovation Summit. UnLeashWD works with NAED and tED magazine, along with other wholesale distributors, to get them to the next level of innovation. 

“The questions becomes what is our plan to remain relevant in this age of disruption,” Beveridge told me. “We won’t be able to out-Amazon Amazon, so distributors must be very clear regarding their vision – what must they become as a company to remain relevant?”

And Beveridge has a strong warning to pass along to you. Read this because it is happening, and you don’t want it to happen to you.

“We must look in the mirror to honestly ask ourselves as leaders, many who never asked for or expected to be in a position with such responsibility during such disruptive times, do we have the will, energy, and focus to transform where needed?   If Innovation comes to a stand still in the industry the businesses will begin to fade away.  There are already stories of individuals who had to sell their business and don’t have the wealth they had planned on for retirement.”

The story in Forbes magazine reports W.W. Grainger is already innovating, and taking on Amazon. So it can be done.

Barry Lawrence, the program director for industrial distribution at Texas A&M University, told Forbes that Grainger is “planning, and they don’t want Amazon to know what they’re thinking.” Lawrence told Forbes the believes Grainger will make it easier for purchasing managers and contractors through technology like mobile apps and loyalty programs to maintain and grow its customer base.

Beveridge says you don’t need to be Grainger to innovate.  “It takes a new, innovative business model, strong and differentiated value propositions, a vision and culture that catalyzes innovation,” Beveridge says.  “All led by those who have the will, energy and focus to transform their business.”

And then Beveridge adds one very important note. “You can do this. Others have and are.”

You can see Beveridge’s new Whitepaper on the Forbes story at www.UnleashWD.com.

The other part of the equation is data.  The fact is, Amazon has hundreds of people who are putting the correct data, with the correct images, sometimes even more than one image, on the AmazonSupply website every day.  Meanwhile, we are still battling to get the best data possible on distributor websites.

Like I said before, this is just the beginning of tED magazine’s stories on AmazonSupply’s threat to the supply chain.  On Wednesday, we will talk with the experts on data, and what you can do to get better data on your websites.

And I have writers and editors working on special stories for tED magazine and tedmag.com for the rest of this year, so we can continue to keep you informed about the AmazonSupply strategies.

If you have thoughts or comments, please contact me at scosta@naed.org.

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