Product, Supply-Demand Chaos is Upon Us
Never has a global, just-in-time, balanced economy been shut down by a pandemic. Then, rebooted with:
- Massive “quantitative easing” by all central banks
- Political, New-Deal-2 stimulus cash to voters and lobbying industries.
- With on-going, escalating trade-wars and supply-chain reshoring.
Continue reading 243. Supply-Chain, “Bull-Whip” Management
Farmers and Hunters?
Around 1870 someone in the insurance industry realized that: selling new policies (hunting) required a lot of rejection. But, collecting monthly premiums on sold policies was easy maintenance (farming) and eventually took up all of rep’s time. No more hunting!
Solution? Split the functions. Then, hire different types for different pay.
Continue reading 214. Farmers, Hunters, Challengers, and Killer-Teams for Gazelles
QPQ For The Good
Politics is giving QPQ a bad reputation. But, “this for that” can also be a selling tool for turning win-lose customer requests into win-win outcomes.
Distributor reps can use QPQ for transactional fairness.
“Mr. Customer: you want a lower price? Understandable! How can we turn a – you win, I lose event – into a win-win transaction? Perhaps a bigger order or the promise of greater future purchases?”
Continue reading 181. ALL-WIN, QUID PRO QUO (QPQ)
American Airlines’ Lost-Luggage, Pain-Removal Solution
On a recent American Airlines trip, I turned on my cell phone as I landed at 10 PM. I got a text from American’s AI-bot alerting me that my checked bag did not make it to my hub-connection flight. There were also links for: filing my lost bag info and desired delivery address; and tracking the bag. Continue reading 179. 2020 I.T. Plans? Lost Luggage Lessons (C*)
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.