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What Distributors Really Think About Amazon Business

What Distributors Really Think About Amazon Business

By Bridget McCrea

Think Amazon is going to be able to ship conduits, board panels, and wire with its fancy drones? Think again, say these NAED members.

In April, Amazon announced that it was moving one step closer to providing everything for business owners by launching Amazon Business, a new website for business owners that the company says will “expand the AmazonSupply brand and provide business owners with a place to shop for all of their business needs. From office supplies to wholesale products, Amazon Business is expected to be even bigger than AmazonSupply.”

And while NAED members are proud of the foothold that they’ve managed to establish and keep within the electrical distribution industry, the sound of a 300-pound e-tailing gorilla knocking on your territory’s door is never a good feeling. Not only is Amazon threatening to steal customers, but the company may also begin poaching long-time distributor sales reps that can help fill in a major gap: the technical experience, application knowledge, and product expertise that no online retailer has been able to provide….yet.

Brad Van De Sompele, president at Frontier Electric Supply in Bensenville, Ill., is one long-time NAED member that’s not afraid of Amazon’s advances into the electrical industry. “It may sound funny to some people, but Amazon really just doesn’t scare us very much,” says Van De Sompele, whose firm doesn’t operate in the commodity-driven world of contractor sales. “Amazon could be a force on the commodity side, but I highly doubt it will have much success in our OEM world, where our customers still have a daily desire for engineering and technical support that is one phone call or email away.”

Of course, Van De Sompele has been in the electrical industry long enough to realize that a company like Amazon will quickly wise up to the fact that it needs a technical support staff in order to attract and retain customers that want that “something extra” from their distributors. “I’m not naïve to believe Amazon won’t dump a bunch of money and hire a bunch of engineers, but will it bring on product-specific experts that can come out to your location on Thursday? I don’t think so,” Van De Sompele states. “We’re constantly getting calls from customers who need someone onsite within 24-48 hours to handle a problem. I really doubt that Amazon is going to be able to fulfill that kind of request.”

And while Van De Sompele admits that Amazon may be able to mobilize a support structure that can deliver technical expertise to its customers, it will likely be 10+ years before that actually happens. After all, the company’s claim to fame is largely rooted in providing items quickly and at a low cost via an online platform. “Quite honestly, I haven’t ever had a single customer of mine tell me that he bought stuff from Amazon that he should have or would have bought from us instead,” says Van De Sompele. “It just doesn’t happen.”

Worry About Yourself
At K/E Electric Supply Co., in Mt. Clemens, Mich., General Manager Rocky C. Kuchenmeister says the idea that Amazon could begin poaching the long-time members of a distributor’s sales/support staff is a bit far-fetched. “At this point it’s more rumor than anything else,” says Kuchenmeister, “although it would probably be a smart move on the part of any distributor that has an online presence.” The bottom line is that selling electrical equipment, parts, and supplies is much different than peddling books, shoes, and purses via an online platform.

“When you’re dealing with something as complicated as which light bulb to use or which fixture to purchase for a large project, the situation becomes much more complex,” says Kuchenmeister. “Getting to the best possible answer requires a level of technical expertise that a software program or application just can’t support.” And while the idea of Amazon taking away distributors’ valued technical staff (and possibly its customers) is certainly a possibility, until that actually happens, Kuchenmeister says his firm will stick to a “worry about yourself” philosophy.

“At this point, the best defense against Amazon is to simply be the best distributor, the best sales person, or the best business owner that you can be. Then you just go from there,” says Kuchenmeister. “You can’t worry about what’s going on with forces you can’t control, like Amazon. I can’t control what’s going on at Amazon, therefore I’m not going to worry about what Amazon is doing.”

Feet on the Ground
Like the two other NAED members interviewed for this article, Bill Elliott, president at Elliott Electric Supply in Nacogdoches, Texas, isn’t overly concerned about the moves that Amazon is making with its new Amazon Business announcement. “I’m not that worried about Amazon because it’s a company that doesn’t have a very quantitative delivery service that’s suitable to the small- and midsized contractors – or even the larger contractors, for that matter,” Elliott explains, noting that delivery issues tend to come into play as soon as distributors (or, online retailers) begin fulfilling large contracts. “You can’t deliver conduits, wire, and panel boards with drones,” says Elliott. “You need to have local service, sales, and delivery staff that know the customers’ needs and that can effectively serve those needs.”

Elliott isn’t kidding himself when it comes to assessing the threat that online retailers could pose for independent electrical distributors either today or in the future. And while it may be decades before we see drones in the air, toting spools of wire to jobsites, it may not be long before e-tailers like Amazon do begin to chip away at the typical distributor’s bottom line. “Where these online firms may have the biggest impact on us is when it comes to servicing customers that need small quantities of hard-to-find items that can easily be shipped via UPS or FedEx,” says Elliott. “As distributors, we will suffer some loss of business due to this trend, although you still need ‘feet on the ground’ to be able to provide the level of service that contractors need and demand.”

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 bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.



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