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How Can Wholesale Distributors Differentiate their Businesses in the Age of Amazon?

By |October 10, 2022 November 14th, 2022No Comments

As a wholesale distributor, it’s important to find ways to set yourself apart from the competition. With Amazon and other online retailers dominating the market, it can be tough to make your business stand out. But it’s not impossible. Currently, Amazon Business sells fasteners, hydraulics, pneumatics, plumbing, industrial electrical, material handling equipment, metalworking, and power transmission items exclusively within the industrial market. 

The digital age has fundamentally changed how things get distributed. Who now dominates the distribution business is no longer based on geography or product type. It’s all about who can be the most efficient and effective in an online marketplace. In the midst of all this, there are still new opportunities to be found in the burgeoning e-commerce market.

However, the key is to understand that you need to take a different approach from your competitors if you want to stand out from them (and other distributors as well). Below are some ideas as to how you can differentiate your distribution business in the age of Amazon.

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Click here to learn how Amazon disruption into supply sector has effected distribution industry since 2015. 

Why is Differentiation Important?

You’ve probably heard the saying “don’t put all your eggs in one basket.” Well, the same principle applies to your wholesale distribution business. You need to find ways to differentiate yourself from the competition if you want to succeed.

Why is differentiation so important? There are a few reasons. 

First, it allows you to target a specific market segment. Second, it makes you more memorable to customers. And third, it can help you charge a premium for your products or services.

In the age of Amazon, it can be tough to differentiate your wholesale distribution business from all the other players in the market. But it’s not impossible. Do you know what is that one element that still keeps wholesale distributors a step ahead?

Amazon Business lacks the product and application knowledge that the average independent distributor has invested years (or even decades) developing. Coupling this knowledge with the digital distribution tactics, you will be able to set yourself apart.

Read More: 3 BEST B2B ECOMMERCE PLATFORMS FOR WHOLESALE DISTRIBUTORS

So how can you go about differentiating your business? There are lots of different strategies you can use, but here are five of the most common ones:

Understand the Digital Capability of Amazon & Identify where you Lack

Why on earth should you spend any money on digital skills when Amazon has so many resources and is so technically advanced? You can’t outspend Amazon Business and eliminate all digital gaps. What’s the point then?

The worst choice is to do nothing. Some wholesale distributors have had superior digital capabilities than others for years, but others who have lagged behind in technology have nonetheless found ways to compete. Distributors must fulfil a set of minimal standards in order to compete, nevertheless, given the rise in customer expectations for online services. While Amazon Business is undoubtedly raising the bar for what customers expect (and, more importantly, will expect in the future), this does not imply that you must match them feature to feature; rather, it means that in order to remain competitive, you must meet a minimum standard of online functionality.

What skills must I possess to master the digital world?

While the correct skill sets are necessary, attracting and keeping the right tech-savvu individual is even more crucial. Wholesale wholesalers understand how important it is to adapt. When asked about the necessity of expanding access to digital training solutions, 86 percent said they agreed, with 50 percent stating that they thought the change was “urgent” or “very important.”

Moreover, The World Economic Forum predicts that over the next ten years, demand for technological skills—including coding and using technology—will increase by more than 50%. So, the post-pandemic workforce will need to undergo two distinct sorts of adjustments to prepare for the future of work: upskilling, in which employees acquire new skills to support their present tasks, and reskilling, in which employees acquire skills to do different or altogether new roles.

What do I need in order to start my digital journey?

Data on customers (including prospects) and goods serve as the foundation for all other procedures you must employ to be successful online. The capacity to create substantial, comprehensive, and adaptable databases of customer and product qualities is one of the main advantages of great digital rivals.

What tech stack is required to provide digital capabilities?

The essential technological solutions you need to activate your digital capabilities are an integrated ERP platform, product information management tool, CRM tool, Pricing Optimization Software, and Marketing Automation System. Being a wholesale distributor, you should definitely consider a Product Information Management (PIM) system connected to your ERP if you have a sizable product mix or if you want your employees and/or consumers to be able to search for your products effectively. Using this approach, you can bring in a massive volume of product data rapidly and transform it into useful information.

eCommerce for wholesale distributors
Store with credit card, gift boxes, buyers vector illustration. Purchase, sale, e-commerce. Shopping concept. Creative design for website templates, posters, banners

Top Tips to Make Your Wholesale Distribution Business Stand Out from the Crowd

1. Focus on Customer Service. 

A great way to differentiate yourself in today’s market is by focusing on providing great customer service. If you can offer customers an easy way to purchase your products, they will buy them from you every time! This means that your customers will be more likely to return and recommend you to their friends and family members.

Usually, while selling to B2B customers, you don’t sell to a single person. You are making a sale to a group of decision-makers with varying degrees of power and organizational positions.

Different people, regardless of their position within the organization, can have a big influence on the purchase, in addition to the fundamental hierarchy, which is unquestionably vital. Every individual in every buying center has the potential to affect the choice at any point if they learn new knowledge or see something they haven’t noticed previously. Only well-presented, high-quality information can motivate consumers to make a buy.

Therefore, the ideal seller for a B2B client is the one who can make the purchasing process simpler. The probability that decision-makers in each buying center will purchase from you will rise if you provide information that is actually useful to them.

So what can you do to improve your customer experience?  

When you provide exceptional customer service, you’re setting yourself apart from the competition. Go the extra mile to make sure your customers are happy—and they’ll keep coming back to you.

2. Innovate and be creative. If you want to stay ahead of the curve, you need to be constantly innovating and coming up with new ideas. Don’t be afraid to try something new, even if it’s a risk.

3. Offer unique products and services. What can you offer that your competitors don’t? Find a way to stand out from the crowd by offering products and services that are unique and appealing to your customers.

4. Get involved in your community. Being involved in your community is a great way to show your customers that you care about your local area. Showcase your commitment to giving back by sponsoring local events or donating products or services to charity auctions.

5. Make use of technology. Use technology to your advantage by embracing online marketing tools like social media, email marketing, and SEO. Make sure your website is user-friendly and easy to navigate and make sure your products are available online.

Relevant Reading: Is Lack Of Innovation Bringing A Growth Gap in Your Distribution Business?

2. Ensure Supply Chain Optimization & Get into Omnichannel Distribution

Even though strong supply chains are crucial, they won’t be sufficient to set your company apart in the present market, when several online retailers and companies are promising same-day delivery. However, some conventional wholesale distributors already possess service capabilities or have the capacity to do so, which might place them ahead of pure-play digital businesses. Moreover, a number of top distributors have started offering omnichannel experiences to give clients a smooth transition between offline and online channels. Accurate demand projections and real-time inventory tracking are crucial to help your customers find the ideal product.

This can’t be done alone. As a wholesale distributor, you need excellent technology support; collaborative commerce is the new normal. To help firms succeed, collaborative commerce improves distribution channels. Technology vendors are now expected to offer collaborative commerce solutions that are intended to help big and small distribution businesses succeed in the market. In order to get better outcomes, it is preferable to be nearer to such businesses. 

Recommended Reading: Distribution Channels 101: The Basics You Need To Know

Omnichannel strategy for wholesale distributors

3. Use Data Analytics to Help Your Customers Make Informed decisions 

In a world where Amazon is the king of eCommerce, it’s more important than ever for wholesale distributors to find ways to stand out. One way to do this is to use data analytics to make better decisions about what products to stock and how to price them. Data analytics can help you understand what customers are really looking for and how to match their needs with the right products. It can also help you identify which products are selling well and which ones aren’t, so you can make adjustments accordingly. 

By using data analytics to make informed decisions, you can give your customers what they want and need and create a shopping experience that will keep them coming back.

Distributors and digital players both benefit from offering tens of thousands or even millions of SKUs to thousands of customers each day. As a result, they have the rich data volumes required to use advanced analytics and machine learning to uncover insightful, granular, real-time information. By dynamically matching offerings, important buying criteria, and consumers’ willingness to pay, they can anticipate customers’ wants, provide alternative solutions, advocate the best products, and accomplish profitable development.

Here are the top ways that help you understand how data analytics help you stand out from Amazon:

  • The sales forecast is essential to make decisions in every B2B firm, from spending decisions to budget considerations. A B2B company can now operate smoothly throughout the financial year, all thanks to accurate sales forecasting. It’s essential to utilize developments in data analytics to keep ahead of your competition as the prevalent techniques to sales forecasting that continue to employ spreadsheets or several business intelligence products are no longer successful.  
  • Generally speaking, B2B companies are unable to provide clients with a typical product portfolio. Additionally, this causes delayed interactions with B2B clients and missed chances. Sales managers can use Data Analytics algorithms to categorize consumers into different categories according to their demands in this situation. Then, B2B salespeople can compare these customer groups to their past clients and make more pertinent product or service recommendations. Additionally, a strategy like this, based on data analytics, might find untapped cross-selling opportunities, boosting income.
Big data analytics for wholesale distributors

It’s Time to Act

Amazon has grown by relying more on technology than on employees. This implies if you are providing something that Amazon is unlikely to be able to replicate and that needs contact with people, you will be able to win in the distribution game. Products that need to be customized before delivery, highly technical products that demand pre-sales consulting, and massive bulk-order items are a few examples.

The internet has changed many things, but it has not changed the fact that people want convenience. They want things to be easy, and they don’t want to have to go through a complicated process to get them. If you can provide a seamless experience that makes life easier for everyone, you have a good chance of standing out from the crowd. The key, though, is to think about how your business can provide customers with a better experience. This can be as simple as improving your website to being more responsive to customers’ needs. If you can do these things, you’ll likely find that your business becomes more successful.

Get the best technology stack to streamline your distribution business. Get in touch with our experts at DCKAP.

Aiswarya Madhu

Author Aiswarya Madhu

Aiswarya Madhu has two years of experience in content creation. Pen and Paper, without them her life is dry. She can manage keyboards too. At present, she navigates the intricacies of eCommerce. When not engaged in writing, she enjoys savoring books and tea.

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