Three Takeaways for Industrial Distributors from the MDM Annual Distribution Trends Special Issue
Modern Distribution Management (MDM.com) just released their Annual Distribution Trends Special Issue, we highlight three takeaways for industrial distributors.
Overall, their research found industrial distributors were somewhat optimistic for the rest of 2017 and 2018, but that shakeups, including ongoing industry consolidation and big moves from Amazon, are keeping them on their toes.
Here are three takeaways from the report:
- Customers and industrial distributors want and expect more in no small part due to the rise of Amazon and other nontraditional competition. For many distributors, that is squeezing margins and challenging their traditional business models. When considering how to respond, ask yourself how you can leverage technology to gain efficiencies and lower your cost to serve. How can you work more closely with your suppliers for a more effective and targeted selling effort? Are there opportunities to consolidate suppliers to lower your overall costs, while not sacrificing quality? Are you taking full advantage of rebate opportunities managed through NetPlus?
- The ups and downs of the past couple of years have underscored the need to diversify, whether that’s in product offering, end-markets or geographies. Oil and gas is one market that has seen more downs than ups, pushing some distributors to mitigate the effect by penetrating other end-markets. Or consider product diversification; NetPlus provides distributors with access to industrial and contractor supply suppliers that offer a wide range of product categories, including jan-san and safety.
- Planning is critical in this rapidly changing market. One distributor told MDM: “The job of the leaders is to set the course and maintain it. So many third-generation businesses fail because they lose sight of what made the company great to begin with.” Take advantage of NetPlus’s Growth Plus planning program to work with suppliers to build a plan for growth that aligns with your company’s vision for your market. Nurturing constructive distributor-manufacturer relationships to support the customer is more important than ever.
MDM also released its annual list of the Top 40 Industrial Distributors, as well as the largest distributors in 14 other sectors. For the Top 40, revenue declined 2.5 percent, on average, in 2016, primarily the result of companies closely tied to oil and gas. We’ve seen a similar impact from oil and gas among NetPlus members, but overall growth for our group remains above the industry average.
One of the best places to gain inspiration to respond to these trends and kick off planning for 2018 is by attending our Annual Meeting. If you’re a NetPlus member, have you registered yet? Join us Oct. 8-10, 2017, in Orlando, FL, to connect through one-on-one meetings with potential and existing channel partners, learn through our keynote and breakout sessions, and network with your peers. Learn more.
Not a member? Learn more about joining NetPlus Alliance.