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Amazon, B2B distributors, e-commerce and survival

By May 2, 2013July 15th, 2018Differentiation

When I think about B2B distributors, it’s hard for me to not think about Amazon and its move into the B2B realm.  Just exactly how scary it that?  Frightfully so, or ho-hum-who-cares?

deep_customer_intimacyAs with many such questions, the answer is, “it depends.”  Here are a few thoughts regarding three things the small to mid-sized distributor really needs to think about deeply:

  1. A truly world-class online store – Are you ready to go head-to-head with Amazon’s IT department?  Can you really do the online merchandising and shopping cart thing better than they can?  Do you want to bet the farm on out-competing them on this front?

  2. Logistics – For purposes of this exercise, I’ll define logistics as order acceptance, order fulfillment and payment processing.  Similar questions.  Given Amazon’s economies of scale, is it sane to think you can win this game?

  3. Customer Service – Back to the IT department.  Amazon will have the best techno tools on the planet. (Face it, odds are they’ll have much better techno tools than you.)  They’ll embed all kinds of knowledge needed to serve customers into those tools, and they’ll use them very, very well.  But can they match your knowledge?  Can they stay on the cutting edge and truly understand the specific nuances and needs of any specific customer environment?

In my book, the answer to all of the above questions is a resounding, “No!”

The sales strategy to take given that answer?  Focus on customer intimacy.  Get to know what the customer needs better than the customer does.  Know it – anticipate it – before the customer does. It’s just that simple.  Challenging as all get out!  But simple.

One final thought about a potentially very fruitful point of attack.  Most analysis indicates that somewhere in the vicinity of 75% of MRO buys are unplanned.  Live in react mode, and Amazon will eat your lunch with their great online store, awesome logistics and low price.  Figure out a way to bring an MRO customer’s unplanned buys down to say, 50%, and leave Amazon wondering what the hell just happened.