distributor using data to review disruptive outlook for distribution industry

Distribution’s Disruptive Outlook: David vs. Goliath Meets Whack-a-Mole

Our friends at Modern Distribution Management (MDM) recently hosted a webinar, Distribution Platforms & Marketplaces-2022 Snapshot & Strategies. One of the main focuses of the session was the always hot topic of the state of e-commerce players and competitors.

MDM’s CEO Tom Gale hosted the panel discussion. It included Alex Modzed and Nick Johnson of Applico, a tech consulting firm specializing in helping their clients level the playing field against tech giants. Additionally, Alex and Nick are best-selling co-authors of “Modern Monopolies, What it Takes to Dominate the 21st Century Economy,” so they know a thing or two about e-commerce threats.

The good news is through aggressive venture capital funding; there are several challengers to Amazon emerging in the market. The bad news is that those new distribution platforms create even more options for your customers to source products. And some of the new contenders are focusing on distribution channels. Up until now, retaining your customers in the e-commerce landscape went from David vs. Goliath to high-stakes Whack-a-Mole.

Where do I fit in this new game?

In the webcast, the panel discussed different initiatives that distributors are undertaking. In simplest terms, the industry breaks into three main categories; Disruptive innovators (giant distributors with robust VC funding and resources), Sustaining innovators (the second-tier innovators who are funded but not leading the pack), and everyone else down market. While at first blush, the gloomy forecast laid out above with even more e-commerce threats sounds bad, it’s not all darkness and doom.

Many distributors in the country, and in particular, White Cup customers, fit in that down-market category. Some of our customers have leveraged distribution platforms successfully and created e-commerce solutions to provide their customers with alternate purchasing paths. However, for other organizations, the substantial funding required to develop an e-commerce channel is not in the cards for various reasons.

So, now what?

The panelists in the webcast made it clear that venture firm dollars are being spent in that disruptive innovation category, leaving the down-market organizations to fend for themselves. That’s nothing new. In the 25+ years we’ve been making our distribution platform, we’ve seen that our customers are some of the most resilient businesspeople on the planet. So, let’s talk about solutions.

1. Continue to focus on relationships: The slickest software solutions in the world will never fully replace customer relationships. Over the years, the business has evolved from handshake deals to e-signature contracts, but it’s still a people business. What can your team do today, this week, or this quarter to strengthen customer relationships? That could be an account review, satisfaction survey, or outreach from senior management to check on accounts.

2. Improve your tech stack: Set aside the status quo of how you’ve always done things with your current technology and see where your tech stack can be optimized across the organization. While distributors have been working hard to battle threats like Amazon and other sales channels, software companies like White Cup have been aggressively creating tech solutions designed to drive revenue, no matter what Goliath or the other Moles are up to.

Contact us if you’d like to learn more about White Cup’s Revenue Intelligence platform, which includes CRM, Business Intelligence, and pricing optimization tools.

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