The art and science of distribution is often discussed in day-to-day business in just about every market, but some may feel that they do not see it in practice often enough in the market place. Today, as markets become more competitive than ever, it has become an everyday occurrence to see the channel partners in the supply chain reposition themselves from being a channel supplier to a “value-added” partner (in other words: a competitor).
This shift is happening in many industries like our plastics stock industry, and the whole idea confuses us. Who are they really adding value to? It’s not to the job shops that buy from them who make a living machining parts to a print. It’s not to the material manufacturer whose products they do not have in stock to service the market beyond their own “value-added” demand.
We often wonder how many metal distributors would survive in today’s market place if they started to make metal parts and sell them in the local market? Who do you really want to choose to do business with, a partner or a competitor?
For years, Plastics International has been warning job shops about Coyote Plastics, a ficticious plastics company that represents all of the “distributors” in the indutry who also compete with you, their own customers in the local market place for machining business.
Coyote Plastics is run by the ruthless Bossman and his loyal employee Eddie. These two are out to sell you a sheet of plastic or two until they can figure out who your customer is and go direct. They will never tell you they are your competitors. The approach may sound something like a “full service” or “value-added” supplier with ideas around those words.