A Closer Look with [JACK KEOUGH]
38 INDUSTRIAL DISTRIBUTION / November/December 2013 www.inddist.com
One of the most interesting comments I’ve heard in a long time was contained in an email to me from the president of a distribution firm in the Northeast. He asserted that
competition was no longer coming from his fellow independent
distributors, but is now from the mega, billion-dollar distributors
that are rapidly expanding through acquisitions.
It wasn’t that long ago when there seemed to be distributors in
every neighborhood within a given region. Your competitor was
down the street or across town and you fought for business in a
relatively confined area.
But all that has changed.
There is no longer – and actually hasn’t been for a while – a defined area to sell your products.
Competition has emerged from a number of sources: the mega-distributors and the “new” challengers such as AmazonSupply.
com and Google Shopping for Suppliers. Distributors have been
slow to react to those challengers— and more competition may be
Don’t be surprised if office supply store giant Staples enters the
industrial arena. Staples, which bills itself as the second largest
e-retailer in the world, obviously has a successful ecommerce platform in place. In 1998, Staples also bought Quill, an office supply
company, for $685 million. Quill is known for its e-catalog, strong
internet presence, and an excellent telemarketing staff.
It wouldn’t take much for them to become a contender in
industrial sales. In addition, many people don’t realize that Staples
already sells janitorial and break room supplies.
Another company that could emerge into the industrial area
is Walmart. Walmart is opening two new distribution fulfillment
centers in Texas and Pennsylvania. Would it take much to have
Walmart sell industrial supplies with a good ecommerce program?
And then, of course, there is Lowe’s, and its recent purchase of
Orchard Hardware in California. Could that be a springboard into
an ecommerce application? Only time will tell.
Regardless of who your competition is, in order to compete,
If you were to look at the many changes that have taken place
over the years, like systems contracts, integrated supply, and the
like, you’ll notice that the impetus for many of these new ap-
proaches have ultimately come from customers, not from distrib-
And that doesn’t surprise distribution industry expert Steve
Epner of BSW Consulting, who has taught innovation and entrepreneurship at the college level.
So why haven’t distributors been more innovative?
“They are afraid of the unknown,” says Epner. “They are used
to being pushed around by everyone in the supply chain. Most
distributors have a motto: ‘that’s the way it’s always been done.’”
Epner advises distributors to “listen to the young people in your
organization. Stop using killer phrases like ‘we’ve tried that before,’ ‘it’s not in the budget,’ or ‘the COO will never approve that.’
Look outside [the industry] to see what others are doing.”
Distributors Need To
Innovate To Compete