Executive Briefings

What Threat, If Any, Does AmazonSupply Pose to Industrial Distributors?

With any discussion regarding the future of industrial distribution, the impact of AmazonSupply is sure to come up. Distributors seem to have differing views on this impact, ranging from fear of ArmageddonSupply to a shrug indicating "this too, shall pass."

To the latter group, AmazonSupply is not a threat because they don’t see Amazon getting “Line 4” up and running at 3 a.m., nor do they see Amazon designing a more efficient drive system for a manufacturing facility. Of course, the question you have to ask these distributors is, “What part of your business uses that kind of expertise and what part of your business consists of getting a purchase order with a list of part numbers?”

Most independent distributors will tell you that 90 percent or more of their business comes in the form of purchase orders with part numbers. What they don’t understand is that it is this portion of their business that is in harm’s way when it comes to Amazon. Although those part numbers represent something to them as an industrial distributor, to Amazon, they merely represent data. Amazon is a technology company that masters analytics dictating where data (product) is and where it needs to go. If you think Amazon is coming to the industrial market, you’re wrong. Amazon is already in the industrial market.

To prove this, a few years ago, Amazon joined the Power Transmission Distributors Association and is now a member in good standing as an industrial distributor.

Read Full Article

To the latter group, AmazonSupply is not a threat because they don’t see Amazon getting “Line 4” up and running at 3 a.m., nor do they see Amazon designing a more efficient drive system for a manufacturing facility. Of course, the question you have to ask these distributors is, “What part of your business uses that kind of expertise and what part of your business consists of getting a purchase order with a list of part numbers?”

Most independent distributors will tell you that 90 percent or more of their business comes in the form of purchase orders with part numbers. What they don’t understand is that it is this portion of their business that is in harm’s way when it comes to Amazon. Although those part numbers represent something to them as an industrial distributor, to Amazon, they merely represent data. Amazon is a technology company that masters analytics dictating where data (product) is and where it needs to go. If you think Amazon is coming to the industrial market, you’re wrong. Amazon is already in the industrial market.

To prove this, a few years ago, Amazon joined the Power Transmission Distributors Association and is now a member in good standing as an industrial distributor.

Read Full Article