Vigorish (“vig”) is the fee charged by a bookmaker (casino or loan shark) for accepting a gambler’s wager. For roulette, gamblers bet on 1- 36 possibilities. The wheel, though, has 38 slots that include 0 and 00. When the ball lands in the 0’s (2/38th or 5.26% of the time) the house takes in all bets. With a 5%+ edge and time, the house prospers.
What if your company had several, service-value edges over the competition? Or, conversely, would you want to compete against a firm that has big, additive, value and/or cost edges over you? Two cases.
#1: Distributor Targets Best, Commercial Contractors (20-50/Location)
With analytics and in-house metrics the distributor:
- Improves fill-rates for the target, customers’ SKU-mix by 10% points. Competitive edge: a guesstimated 3-15% points over the competitive field.
- Reduces errors per thousand-line-items-picked to less than 2.
- Achieves (for target accounts) a 99% on-time delivery score.
- Announces (for targets) a – zero error, on-time-delivery – guarantee.
- For failures: a half-day fix response with a $100 credit to cover the hypothetical cost of the paperwork and downtime for the contractor. (“Heroic Recovery”)
- All quotes completed within a half-day. Elaborate ones: a promised, response time that still beats competitors.
- Sells the value benefits of these services constantly.
Results? Target sales double in one year’s time. (Plus, more!)
#2: Amazon Business’ Total Vig for Spot Buys
- Many more SKUs than any B2B distributor.
- Highest effective fill-rates due to redundant resellers’ stock.
- 24/7 web ordering on the best-performing website.
- Click to ship time: 15 minutes with total human labor content of $1.00
- Delivery: one-day to same-day (and shrinking)
- At lowest total delivery cost (and dropping)
- Best real-time tracking
- Offers integration into any BigCo’s internal, catalog system with…
- …contract pricing and central spend management tools.
- No minimum orders or freight.
- Unprofitable small orders? Offset by monetizing the customers’ clickstream.
- And, more innovations to come.
- Don’t sell small customers on Amazon’s terms to “win” net, unprofitable orders.
- Do have web-order-entry terms that are net profitable. And, expect to lose unprofitable, spot-buy orders to Amazon.
- Do sell one-stop-replenishment orders with: a “build-your-order-for-discounts” calculator coupled with shopping-list-suggestions. Goal: margin-dollar content exceeds fulfillment dollar costs for a profit.
- Don’t be distracted from creating and selling service vig to best, big accounts!
To solve: C-19 challenges; fix losers; and do more with winners – check out my new, 12-webinar series aimed at “winning at Cloud Ecommerce”.