Changing your distributorship to a service provider role requires sales people to change, business consultant Barry Lawrence told the National Fastener Distributors Association and Pacific-West Fastener Association joint meeting.

“They have to become a different type of salesperson,” said Lawrence – who is with the Industrial Distribution Program at Texas A&M University. “Listen to the customer.” 

Get paid to sell your services, not just fasteners. “That’s a whole different salesperson.”

“The days of handing samples to a new salesperson, giving them the car and saying, ‘I’ll see you later’ are over,” Lawrence declared.

What distributors need to do to “go head-to-head with the Amazon world” is to “develop new services and get paid for the services,” Lawrence said.

“I doubt your suppliers are enamored with Amazon,” Lawrence suggested a source of support for the distributor.  

Is the customer interested? They want to know where the product is and if you can track. “They want to be able to look it up online.” That is in three clicks at the most, Lawrence added.

Distributors need to ask: “Why should customers do business with us?”

The answer may be “problem solving,” Lawrence said. That is the “value you are going to share.”

New technology brings prices down with emphasis on “Lean, lean, lean,” Lawrence pointed out.

There are ways to cut. Lawrence cited combining warehouses as an example. Besides one less building it can cut inventory in half.

If you aren’t finding ways to be leaner, “someone else will,” Lawrence warned.

But cuts need to come with ways for you to profit, which you won’t gain “if you give away all the services.”

It isn’t just about what your website can do, Lawrence said. “What about your people?”

The first step in building a strategy is recognizing investor, supplier, customer and team visions. Then capability must be analyzed: Products, services, markets, processes, human capital, information capital and the organization’s structure.

That leads to developing strategic objectives and targets. Phase 3 includes prioritization and five-year planning.

Interconnecting and digitizing the channel is about customer goals, distributor goals, supplier goals and “connecting them all with data analytics.” Web: id.tamu.edu