Earlier this fall, MDM released the list of largest distributors for 14 industrial segments based on revenue volume. Amazon Business is listed at No. 4 in the industrial segment. MDM is merely reporting on what the companies themselves have reported, and without question Amazon is selling commercial products; but I wonder how much of their reported industrial revenue is core to what a traditional industrial distributor supplies.
Within the same week, IHL Group, which focuses on the retail sector, reported that for every business closing a retail store, 5.2 new retail stores are opening. This tells us that many larger multi-location retailers like Sears continue to struggle while other more targeted retailers are opening new locations. So, there is still success in retail, but it has shifted towards those that focus or specialize.
The world is changing and yes, it is changing more quickly than ever. Technology, marketing, 24/7 access to news and the internet, and workers dedicated to changing the world so their company wins are all at the center of this rapid change.
But, is the future really what we think it will be? Do we all have to 100 percent transition our businesses to be successful in the future? My opinion is a very solid no! But we can’t remain 100 percent the same either. We need to invest the time to understand what we do best, what has made us successful and what our customers want and need. If we can successfully answer those questions, then we can build a plan to increase our value to the market and deliver ongoing success.
Consider the 80/20 rule when looking at your customer base, supplier base and employees to get a better understanding of your business. The 80/20 rule will help you identify the 20 percent that are responsible for delivering 80 percent of your results. In my experience, knowledge, relationships and fit are key factors for many of those that fall within the 20 percent. So how do you continue to build upon this? Pick your partners carefully, invest your time wisely, form partnerships and build relationships. Build a plan with your partners.
Remember what Yogi Berra once said: “It’s difficult to make predictions, especially about the future.”
Take the time to understand what drives your success, what your customers want and what they need, and then use your entrepreneurial spirit to build a plan. Focus on what you do best, consolidate suppliers and expand into new categories or build out your online presence. Knowledge, relationships and fit are key drivers of success for the future just as they have been in the past. Yes, some old-school business tactics will remain a differentiator in the business-to-business world. Your people need product knowledge, you need the right relationships with suppliers and customers, and you need suppliers and employees that fit your plan.
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