Monthly Archives: February 2019

137. Amazon’s Channel-Model Innovation Challenge

AmazonBusiness, Big Data, Distribution Industry Sales, Distribution Strategy, Index, Supply Chain Partners, WayPoint Analytics

LEVELS OF INNOVATION: INCREMENTAL, BUSINESS-MODEL, CHANNEL-MODEL

All businesses innovate. But, rearranging the deck furniture on the Titanic (an incremental innovation) is not as powerful as getting an iceberg-resistant ship or an ice-berg-free route.

Business-model innovation is when you rethink the system of how you organize your resources to create a breakthrough value for some target group of customers. You may also, simultaneously, eliminate wasteful or dying activities. Common phrasings: Weed to feed. Prune to grow. Downsize, Upgrade, Refocus and Revitalize. Do a “Blue Ocean Strategy”, etc.

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136. SELL WIN-WIN, LOWER PRICING (?)

Big Data, Concierge Customer Service, Cost-to-Serve Math, Distribution Industry Sales, Distribution Strategy, Index, LIPA, Profit Analytics, WayPoint Analytics

PRICING EFFICIENCY ISN’T PRICING EFFECTIVENESS

Practice good-pricing hygiene. Don’t underprice SKUs or customers if they will continue to (happily) buy from you at higher prices. But, consider also the positive trade-off of lower prices in exchange for larger average order-size buying. What are your general buying and selling incentives for increasing order size?

CASE STUDY ON ORDER-SIZE ECONOMIES

For 2018, a $100MM contractor-supply distributor had roughly 4000 active accounts. More facts:   

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135. Fix Your CRaP Items and Their Root Causes

AmazonBusiness, Big Data, Cost-to-Serve Math, Distribution Industry Sales, Index, Line Item Profit Analytics, LIPA, Profit Analytics, WayPoint Analytics

AMAZON’S WAR ON CRaP

Amazon’s analytics can identity SKUs on which they “Can’t Realize a Profit” (CRaP). Even with their improving, world’s best fulfillment and last-mile delivery costs, they can’t cover costs on items lower than $15 per pick/order.

AMZ’s fixes to date?  

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