Selling-Model Stress Fractures?
Recent surveys find that next-gen, B2B, digital-first buyers want only-scheduled-as-needed sales rep calls. They prefer, initially, maximum e-information and real-time e-support: 24/7/365. And, texts about real issues are preferred over “how’s-it-going”, outbound phone calls. Continue reading 178. 2020 Sales Force Plans/Questions (B*)
Principles for Innovating
Google: “Amazon’s 14 Leadership Principles”. Here’s how a distributor put them to work.
Principle #1 (P#1); “Customer Obsession”
(CEO speaking): We subscribe to a customer/SKU, net-profit analytics service. We were initially shocked by the net-profit winners and losers. But, if we were going to reinvent service-value in a Frugal (P#10) way, we should start obsessing about our most net-profitable customers and customer niches. Continue reading 176. Distributor Puts Amazon’s 14 Principles to Work
A B2B Channel-Threat?
In June 2019, Amazon introduced a new B2B brand: AmazonCommercial. The first items in the line? T&T! (For more search AmazonCommercial at AMZ).
What’s Amazon thinking? Amazon Business has gotten traction
with a “long-tail”, MRO/SKU strategy specifically aimed at huge entities. AMZ
has attracted an army of resellers to curate millions of B2B SKUs. And, in parallel,
AMZ has created two cloud solutions: integrations for 60+ internal procurement
systems, and free, central-spend-management tools. This evolving proposition now
wins up to 20% of a typical big-buyer’s MRO spend.
AMZ’s next B2B moves? Target some bulky, big-volume,
consumable, SKU? All employers do buy T&T… but how price-competitive can
AMZ be? Or, conversely, how net-profitable are T&T for distributors?
A Distributor’s T&T, Net-Profit Math
Checking with a “Jan-San” distributor who subscribes to
Waypoint Analytics’ “Net-Profit Analytics” cloud-service, here’s what we found:
- The distributor breaks even overall on warehouse
business. Direct sales account for all operating profits.
- The 7000+ warehouse SKUs were sorted into 100+
- Ranking the product categories by net-profits:
the top 25 totaled big profits, enough to pay for 100% of all losing product
- The biggest losing category was equipment parts.
The category has an excellent margin percentage. But, the many small-dollar
picks have less margin-dollar content than the fulfillment-dollar costs to
yield losses. The size of both picks/orders and fulfillment costs matter.
- Two of the top 5 most net-profitable categories
were T&T! The categories’ low margin percentages were more than offset by
- No big customers have yet to negotiate with AMZ
Questions to Live Into:
- What will Amazon invent for in-the-cloud buying
tools, bulk-distribution capabilities, and/or business-model partnerships, to win
more B2B spend? And, more B2B searches and clickstream data to monetize via
- Why are legacy channel players blind to the
net-profit/loss cross-subsidies that exist amongst both SKUs and customers?
- Won’t both AMZ and big-boxes introduce more
private-label clone SKUs to eat into channels’ most net-profitable SKUs?
- Will channel players beat AMZ to inventing an
in-the-cloud, channel-model for skid-quantity consumables? (I can envision such
a game-changing model.)
- What analytics do factories and distributors
need to minimize AMZ’s takes while maximizing gains from slow-moving,
For more, be in touch: firstname.lastname@example.org. Waypoint clients can also attend my Nov 7th workshop. Link below:
Remember Back In the 70’s…
When Japanese products surpassed the quality of US goods. Then,
zero-defect methods jumped to the US in the ‘80’s. (Phil Crosby’s book,
“Quality is Free” was published on 1/1/80.) And, “Do It Right The First Time” became
the high service-value, low cost, high morale way to go.
Continue reading 169. What Happened to “Total Quality Management”, etc.
A “BE-LIKE-THESE-GUYS” ARTICLE
Google and read – “The Astros are Major League Baseball’s
Happy Place” – an (8/16/19) NY Times article. Or, reflect on these out-take
Continue reading 163. Become A Happy, Winning Company