UnleashWD: Strategies for Distribution Companies to Compete With Google

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Google recently entered business-to-business sales. UnleashWD experts provide strategies for distribution companies to remain relevant.

“Google and Amazon know how to sell widgets, but they don’t know anything about them,” Scott Costa, publisher of tED Magazine.

While distributors need to take the threat of major non-traditional competitors seriously, businesses that update their offerings to serve their customers should be able to adapt and remain relevant according to a panel of distribution experts gathered for the UnleashWD webinar: "Preparing for Google’s Entry into Distribution."

"Google and Amazon know how to sell widgets, but they don’t know anything about them," Scott Costa, publisher of tED Magazine. "Distributors need to know what Amazon and Google don’t do well and take advantage of it."

Google’s Shopping for Supplies beta website, and Amazonsupply.com will force distributors to improve and focus their services according to Jack Keough, contributing editor at Industrial Distribution and a contributor at tED. One way for distributors to fend off new competitors is to become a de facto employee of their customer. In this scenario distributor provides expertise on their products and serves as a buyer for the company they sell to.

Keough said that the distributors most at risk are ignoring the change coming to the industry because companies will lose customers if they do not upgrade their offerings. Customers expect the ability to complete orders online at their convenience, and Keough has found many instances of distribution companies allowing their websites to become outdated.

"Many distributors are not taking the threat of Google seriously enough," Keough said.

Part of the problem is that Google and Amazon have not released a lot of information on their distribution offerings or statistics on their current sales. Keough said that the initial surveys show that Amazon has already shown great reach over the market place. In some cases manufacturers were not even aware that their products were being sold on Amazon.

Linda Taddonio, chief eCommerce strategy officer for Insite Software said that Amazon has computers crawl the Internet to find the lowest prices. Amazon does not mind taking a loss on certain items now in the attempt to increase their market share. Distributors of commodity products will be the first to feel the impact of Google and Amazon Taddonio said, and Amazonsupply.com and Google’s Shopping for Supplies are only the initial wave. Amazon is also entering into providing food on a wholesale basis and is experimenting with offering services.

Rapid change is the new rule in distribution. Google and Amazon will challenge distributors to reexamine their business models and streamline their operations.

"Distribution companies need to learn how to innovate and senior management needs to lead the way," Taddonio said.

This is the message that Dirk Beveridge wanted to bring to the wholesale distribution industry by founding the UnleashWD innovation summit. UnleashWD is the only innovation summit for the wholesale distributors and their channel partners.

"Distributors need to create an environment where taking a risk is acceptable because that’s how value is created," Beveridge said. "Sticking with old business models as the market changes ensures disruption."

The experts at the webinar agreed that distributors still have time to adapt—as long as they recognize the need to change.

The bottom line is that distributors will still have a place in the marketplace as long as they are providing their customers with value. The webinar was part of a series of presented by UnleashWD.

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Christopher Troksa
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