To start, Amazon (AMZ) is teaching (especially) – younger, smarter, richer, busier – people to prefer buying on-line. Costly outside and inside reps aren’t in the equation. Follow below for some facts and questions about rep value in distribution.
AMZ Service v Traditional (Distributor) Service
- Flexible hours, many prefer ordering digitally 24/7/365 v. 8-5; Mon-Friday; via people.
- Speed of Re-Buys: Re-buys on AMZ are faster than going through people. Folks are nice. But, they: slow things down; make mistakes; and offer limited, informational possibilities.
- Delivery response-time options from 1 hour, or to a few days beats one standard choice.
- Want information and demo videos on anything. AMZ and Google excel.
- Want crowd-sourced and rated reviews that beat one Rep’s opinion? AMZ provides.
- Other personal activity information? AMZ has it.
- Want to Check Prices or get The Best Price for popular, most-profitable-to-distributor items (SKUs that average high, Gross-Margin-Dollars per pick). AMZ has both (or Google it). AMZ can underprice most-profitable commodities due to its lowest cost: web site; warehouse picking; lack of reps; and eventually, last-mile-delivery costs.
- Distributors win on: popular, small-dollar picks. They’ll pick “one”; charge “list” and lose money. For instance, these picks don’t have enough gross margin dollars to cover service costs.
- Knowing net-profitability for every SKU pick, AMZ charges more; bundle multiples; and make them add-on items.
- AMZ steals cream items from competitors that have cross-subsidies between most net-profitable and unprofitable SKUs.
- So, do your Reps make just-in-case-you-want-to-see-me calls? These calls add 5% more to customers’ prices for what eroding benefit to customers?
Facts and Questions About Rep Value in Distribution to Live Into:
- Why do most Millennials want to circumvent outside and inside Reps? Economic logic!
- AMZ’s threat to distributors (that especially ship via UPS) will grow; what should they do?
- What valued, “extra services” can you invent for big customers that AMZ can’t?
- How will Reps reinvent their value proposition to support personal-call costs?
- Could Reps sell total-replenishment-system solutions that beat AMZ’s value proposition?
- And, do you have the line-item, buying statistics for each customer to identify and cure hidden, unnecessary, buying-activity costs?
- Even with necessary analytics, what is your salesforce 2020 vision and migration path? What current Reps will make it?
- Go to www.waypointanalytics.net. Request a demo of the analytics for your 2020 needs.
- Go to www.apicconference.com. Hold April 20-21 for the Phoenix meeting.
- Inquire about my Line-Item Profit Analytics one-day workshop.
Email me at email@example.com to learn more.