By Bill Wade, Wade & Partners
Heavy-duty distributors and truck dealers have been increasingly investing in software for e-commerce with fleets, municipalities, suppliers and groups, spending six to seven figures annually on technology. However, a recent Benfield Consulting review throws doubt on the ability of most distributors to positively move sales online.
The failure to move more transactions online diminishes the return on the software investment. It also takes distributors out of the high growth online sector where compounded annual growth is roughly three times that of sales-assisted, full-service distribution.
By 2020, nearly 20 percent of currently stocked items sold will be transacted online in B-to-B markets. If fleet specialists don’t get online right, and soon, they will become known as a contracting channel; much like brick-and-mortar retail is seen today.
Two end-user studies find that distributor customers are increasingly buying direct from manufacturers and non-traditional suppliers (Amazon). The distributor research studies find that once firms reach average to above-average sales online (between 10 percent to 15 percent of total volume), they begin to lose online sales.
What’s the problem?
Based on over 40 years in this business, I feel that the primary culprits are the branch cost structure and the culture of traditional distributors and dealers.
