Competing with web sales in the new supply chain

In a recent blog post, I briefly touched on the topic of warehouse distributors selling direct to end-users based on an email I received showing one of the W/Ds selling direct through a major online retailer.


In a recent blog post, I briefly touched on the topic of warehouse distributors selling direct to end-users based on an email I received showing one of the W/Ds selling direct through a major online retailer.

Of course, with eBay, Amazon and other sites, it's always been easy for an entrepreneurial type to buy tools and then resell directly, based on price alone, to the customer without really knowing the tool or the needs of the customer.

I think the veil is just starting to get thinner. And several folks posted, agreement that these tactics are happening.

Some of your comments so far include:
• "They are only concerned about their own bottom line and not the long term effect this will have on the mobile tool business. I have been forced to shift my business drastically. …"

• "As a manufacturer that does not sell to internet sellers I can confidently state that we are deeply concerned about the trend of internet sellers without an investment in inventory, storefront, or vehicle undercutting the prices and efforts or either mobile or brick & mortar retailers. …"

• "Manufacturers do it, and WD's do it. With shrinking margins, it is a defensive tactic, in fact a survival tactic. There is no way to regulate it because the websites are set up under alias companies. …"

• "Speaking as a US tool manufacturer; every party to the supply chain, not just the manufacturers, need to control their ‘corporate greed'. … Tool trucks offer value and services that can never be replaced by the internet. ..."

I think what it comes down to is that capitalism is still capitalism and some see a way to make money through the traditional supply channels, as well as the new supply chain as dictated by the price-centric web. Even though the end-user remains the same and you end up competing with yourself. It's funny how something can make sense, and not, at the same time.

Let me know what you think by clicking on the blog link at www.professionaldistributormagazine.com.

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