What’s on the Minds of Distributors this Summer?
By Dan Judge
NetPlus members have been enjoying a robust year in sales growth, based on the first quarter’s Industry Outlook for 2019. We’ll be sending out the second quarter’s survey soon. Compared with the same time last year, growth appeared to be due to an influx of new customers and the addition of new categories for increased business from existing customers. While the general consensus is optimistic, seasoned distributors know to keep their eyes on the horizon if they want to remain agile in the changing market.
When asked to provide their concerns for the industry in the coming months, many distributors offered some interesting feedback. Of course, Amazon remained top of mind, but responses also included health care costs, finding and retaining talent, and the economy in general.
In addition to these concerns, a few other issues weigh heavy on the minds of distributors this summer. They are as follows:
- Managing customer expectations
- Replacing an aging technical sales workforce
- Fear of a recession
- Tariff resolution
- Inventory control management
- Improving operational efficiencies
As with anything in life, fears about the future are natural. What you do with those fears is what defines you. We asked members to offer their plans for the next five years.
Many reported plans for major ecommerce initiatives, the expansion of sales staff, and the addition of branches in new geographic markets. Approximately one-third of all respondents reported new product categories as part of their long-term plans. Front-runners in the new product categories include general industrial MRO, safety and janitorial supplies. Distributors looking to expand their offerings are also invested in developing their capabilities and knowledge in new areas.
Many distributors are also acknowledging the benefits that are possible by offering value-added services such as vending and inventory management. Providing customers with more options and value makes it harder for the competition to take business away.
NetPlus Alliance helps industrial and contractor supplies distributors leverage their purchasing power as a group and offers members ways to improve their product selection, negotiate pricing and manage rebate programs to create new channels for growth.
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