Category Archives: Distribution Industry Sales

178. 2020 Sales Force Plans/Questions (B*)

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*)

177. Scary Strategic Questions for 2020 (A)*

The Usual Drill and What Breakthrough-Insight Experiments?

Calendar-year distributors: what’s your planning routine for 2020? Is it forecasts, goal setting and budgets, to beat last year by trying harder? Plus, what big-new-competitive-advantage experiments will you be trying? If you aren’t planning something a bit scary, then you are doing same old stuff in new clothes to get fading results. Continue reading 177. Scary Strategic Questions for 2020 (A)*

The Usual Drill and What Breakthrough-Insight Experiments?

Calendar-year distributors: what’s your planning routine for 2020? Is it forecasts, goal setting and budgets, to beat last year by trying harder? Plus, what big-new-competitive-advantage experiments will you be trying? If you aren’t planning something a bit scary, then you are doing same old stuff in new clothes to get fading results. Continue reading 177. Scary Strategic Questions for 2020 (A)*

176. Distributor Puts Amazon’s 14 Principles to Work

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

171. AmazonCommercial’s Towels and Tissue (T&T) “Experiment”

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:

  1. The distributor breaks even overall on warehouse business. Direct sales account for all operating profits.  
  2. The 7000+ warehouse SKUs were sorted into 100+ product categories.
  3. Ranking the product categories by net-profits: the top 25 totaled big profits, enough to pay for 100% of all losing product groups.
  4. 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.   
  5. Two of the top 5 most net-profitable categories were T&T! The categories’ low margin percentages were more than offset by large, average-dollars/pick.  
  6. No big customers have yet to negotiate with AMZ T&T prices.

Questions to Live Into:     

  1. 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 advertising?   
  2. Why are legacy channel players blind to the net-profit/loss cross-subsidies that exist amongst both SKUs and customers?
  3. Won’t both AMZ and big-boxes introduce more private-label clone SKUs to eat into channels’ most net-profitable SKUs?
  4. 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.) 
  5. What analytics do factories and distributors need to minimize AMZ’s takes while maximizing gains from slow-moving, traditional competitors?

For more, be in touch: bruce@merrifield.com. Waypoint clients can also attend my Nov 7th workshop. Link below:

WayPoint Institute 2019

169. What Happened to “Total Quality Management”, etc.

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.