46. Best Customer Service? None! Re-Vision Rep Value in Distribution

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

    1. Flexible hours, many prefer ordering digitally 24/7/365 v. 8-5; Mon-Friday; via people.
    2. 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.
    3. Delivery response-time options from 1 hour, or to a few days beats one standard choice.
    4. Want information and demo videos on anything. AMZ and Google excel.
    5. Want crowd-sourced and rated reviews that beat one Rep’s opinion? AMZ provides.
    6. Other personal activity information? AMZ has it.
    7. 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.

  1. 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.
  2. 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?

Action Steps:

  1. Go to www.waypointanalytics.net. Request a demo of the analytics for your 2020 needs.
  2. Go to www.apicconference.com. Hold April 20-21 for the Phoenix meeting.
  3. Inquire about my Line-Item Profit Analytics one-day workshop.

Email me at bruce@merrifield.com to learn more.

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