Trends: Distributors Discuss Supply, Demand

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The world of distributors has changed significantly in the past five years, with mega-consolidations, Amazon’s rise, the lingering trade war, labor shortages and cybercrime all becoming major factors.

This story originally appeared in Trade Only Today.

The latest hurdle — and perhaps the most challenging to date — is determining the impact that coronavirus will have on supply chains, world financial markets and customers’ discretionary spending.

Here’s how industry experts are thinking about the path to the present, as well as what’s coming in the future”

“Our needs have not changed, but the customers’ have,” said Mike Conners, president of Land ‘N’ Sea. “Today’s customer is more computer savvy and expects omnichannel convenience. Manufacturers are now building relationships with consumers directly on online platforms, circumventing distributors. Amazon has become a priority for many manufacturers over distributors, disrupting channel pricing in the marketplace. You are seeing more consolidation in both manufacturing and distributing.

The challenge remains for distributors to adjust to today’s environment with online platforms going direct to consumers and cutting out distribution. On a positive side, our industry has many products and applications that a DIY customer can’t necessarily service or install, so distribution will continue to be the hub for the mechanics and service shops that rely on distribution for their service and product needs daily.”

“Technology has changed how distributors sell to dealers,” said Mike Keller, president of Keller Marine & RV. “For 100 years, distributors used a paper catalog to display their products. Over the last 10, almost all distributors have made their websites the primary method of selling products, allowing distributors to introduce products to dealers much faster than an annual printed catalog. The speed to market was something that suppliers were looking for.

Computer design and modeling has come so far; suppliers can now develop products from idea to production in less than six months. The pressure from online retailers and marine suppliers led the way to this major change in the go-to-market strategy of marine wholesale distributors.”

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