3 Strategies for Growth for Industrial Manufacturers and Distributors

For manufacturers and distributors who sell to businesses, the changes in the market can feel discouraging.  The products you sell can be purchased from an increasing number of companies and they are becoming easier to find and purchase every day, using technology. 

This dynamic has existed for some time in retail.  It was slower to hit B2B, but there is no denying what is happening.  Amazon Business surpassed $10 billion in sales in 2018 and is ranked the #6 largest industrial distributor in the US by Modern Distribution Management. Grainger accounts for 6% of the overall Maintenance Repair and Operations market.  30% of their sales today come from eCommerce.  They predict that digital sales will eventually represent 80% of their overall revenue. 

This puts pressure on your profit margins and adds anxiety in your strategic planning process.  It can feel like a race to the bottom.  But don’t give up, there is good news!

I recently spoke on a webinar, How to Grow with the Digital Commerce Giants: How We Believe Amazon Business and Grainger Have Created an Opportunity for You to Grow Revenue and Profits.  Here are three concepts I covered that offer hope.

Opportunities to Collaborate

You can work with digital giants like Amazon and Grainger to benefit from their online visibility to sell your products.  I recommend against selling all your products through their marketplaces.  Determine a strategy to best use these platforms to benefit your business. Be selective about which products you sell via 3rd parties and build your own digital commerce site to enable you to offer self-service tools that build your customer relationships online and protect your profit margins.

Your Superpower: Your Unique Digital Focus

While there are larger companies who offer your products online, there are advantages you offer over them.  For many companies we have worked with, this is related to their internal subject matter expertise.  You have been in this business for 50-100 years and you have knowledge that can make your customers’ lives easier.  Focus on where your target customers’ pain meets your subject matter expertise and develop an online strategy around that as your area of differentiation.

 

Narrow in on your ideal customer and create content that specifically addresses their needs better than anyone else online.  Done right, this will create value for your customer that will outweigh benefits that are offered from larger digital giants

To be successful, you need to offer digital self-service tools that make your customers’ lives easier.  But, if you offer enough value through your subject matter expertise, you don’t have to offer every online tool that your larger competitors do.  By making it easier to do business with digital tools and combining this with your uniqueness, you will grow your revenue, customer loyalty, and by extension, profits.

Leverage Machine Learning Technology

Gartner Research states that “by 2018, organizations that have fully invested in all types of online personalization will outsell companies that have not by more than 30%.”[i] As you plan for the digital experience you will create for your customers, we recommend including personalization features and functionality as a part of your strategy. 

There are many different forms of personalization that can be leveraged to grow your revenue.  These are tools that strategic digital merchants are using, and you can benefit from as well.  Machine learning and personalization enables you to increase your average order size and customer loyalty by suggesting and products that they need even before they know they need it.

There’s More: Addressing Common Challenges, Anticipating Customer Needs

We have more information on common barriers that organizations face in achieving digital growth and how to overcome them, as well as specific examples of how to anticipate customer needs in our webinar.  If you are a manufacturer or distributor who is looking to increase the revenue coming through digital, gain access to our 30-minute webinar recording here:

How to Grow with the Digital Commerce Giants: How We Believe Amazon Business and Grainger Have Created an Opportunity for You to Grow Revenue and Profits


[i] Gartner Research, Embrace the Possibilities and Distinct Characteristics of B2B Digital Commerce for Optimal Results, Jason Daigler, Penny Gillespie, Chris Fletcher, Sandy Shen, Refreshed 16 January 2019, Published 16 May 2016

Lori McDonald

President & CEO

About

Lori McDonald

Lori graduated from Purdue University with a Bachelor’s degree in Computer-Electrical Engineering and leads Brilliance Business Solutions with over 20 years of computer engineering and software development experience.  She is an Episerver EMVP, a Microsoft Certified Professional and a regular contributor on Practical eCommerce. Her status as a recognized industry expert has resulted in regular speaking engagements at business conferences.

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