Every weekday in December, tED magazine is counting down the Top 20 Stories of 2014. Below, the #20 story of 2014, originally posted on April 23, 2014.
By Bridget McCrea
In AmazonSupply Steps into Commercial Lighting, tED magazine let readers know how Pittsburgh-based decorative lighting OEM sales rep agency Lighting Solution Development had posted a call for new lighting vendors on AmazonSupply’s behalf. On the AmazonSupply Seeking Commercial Lighting Vendors page, the company stated that the lighting and electrical buyer at AmazonSupply recently challenged Lighting Solution Development to bring it commercial lighting and electrical lines.
The article caught the interest of tED magazine readers and ranked as one of the site’s most read articles for several days. This level of interest begged the question: What can independent electrical distributors do to effectively compete against this web behemoth without slashing prices? In this 2-part series we’ll explore the options and show how firms can hone their business strategies and outpace larger competitors.
Take the “Scrappy” Approach
When the web’s 800-pound gorilla throws its hat into any ring, the existing players in that industry naturally cringe. The good news, says Bill Burnett, founder and CEO at Chicago-based online presentation tool developer PointDrive, is that smaller, “expert” distributors do have an advantage over companies like Amazon. For starters, he says smaller, regional electrical distributors can stay nimble and less bureaucratic than their huge, multinational competitors.
“When you’re running a smaller firm, you can stay nimble and make faster course corrections and decisions,” says Burnett. “You can also be a bit scrappier – unlike the larger firm that has to deal with a lot of red tape and policies.” So when that long-time electrical contractor client needs a large order delivered to the job site within two days, the NAED member can kick into gear and get the order fulfilled without having to jump through myriad hoops to make it happen.
“Play up the fact that you can make decisions on the fly that help your customers work smarter, better, and faster,” advises Burnett, “rather than having to pass decisions up three different levels of management. Customers will appreciate the fact that you can be more timely with your responses and actions.”
The fact that an online retailer like AmazonSupply isn’t known for getting face-to-face with customers – and down-and-dirty on local jobsites – is another advantage that the independent wholesale distributor can play up in today’s competitive business environment. “Even in our digital world, there’s still a lot of benefit to being face-to-face with customers,” says Burnett. “Showing, telling, and hand-holding still go a long way in this industry.”
Don’t Pass the Ball
The fact that most distributor staff members handle multiple jobs (or, that they have been “brought up” through the company and cross-trained along the way), is another advantage to emphasize during the selling process. A sales rep, for example, may also be a customer service and/or support specialist who can not only sell products and services, but he or she can also deliver support both during and after the sale. Having that single point of contact – versus having to dial a 1-800 number and hope someone knowledgeable answers – can be a major selling point for an electrical contractor.
“At larger firms, the ball is passed around as the order moves through the sales process,” says Burnett. “The fact that a smaller distributor has fewer departments and employees can actually be a good thing when managing customers, orders, requests, and even complaints.”
And remember, says Mark Faust, principal at sales and marketing consultancy Echelon Management in Cincinnati, that companies like AmazonSupply don’t have the ability to truly partner with their customers. In most situations, such companies compete solely on price and nothing else. That leaves the door wide open for the electrical distributor that forms relationships, consistently fulfills customer needs, introduces contractors to new products and solutions, and takes the time to cultivate its customer bonds over time.
Don’t Just Sell Them Something
With AmazonSupply showing signs of infringing on electrical distributors’ territories, now is the time to shore up those customer relationships that you’ve worked so hard to develop. “If you’re truly partnering with your customers as opposed to just ‘selling them something,'” says Faust, “there’s real value in that.” In some cases, convincing customers to think beyond price may require creativity on the distributor’s part, says Faust, who advises companies to look closely at customer pain points and areas where other suppliers are falling short to find competitive advantages that are just waiting to be exploited.
“There’s always a new creative solution to provide and more value to add to the relationship,” says Faust. “You just have to ferret it out and leverage it to your advantage.”
Finally, Burnett says electrical distributors should avoid competing where they just can’t compete. With AmazonSupply, for example, the low price points offered by the online retailer may be difficult to overcome. “Even if you can’t compete with Amazon in terms of scale, size, and discounting, there are many other tactics you can use to rise above this new development and actually use it to your advantage,” says Burnett. “Being personable, forming strong relationships, focusing on above-par service, and responding to requests quickly are all very good starting points.”
McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at email@example.com or visit her website at www.expertghostwriter.net.Tagged with tED