Distributors Offer 2010 Industry Forecast

Q: What are some of your thoughts on the Ten Ways to Succeed that distributors identified?

Richards: One big area that has been growing and will continue to grow is online marketing and search engine optimization. If distributors are looking for new business, customers need to be able to find their websites easily and be able to navigate these sites easily.

Of the distributors we surveyed, 51% said they will be hiring this year, which is good news.

Morrison: In Michigan, where we are located, we are starting to see a trend where companies are hiring more people.

William Atkinson is a freelance writer specializing in supply chain management.

Ten Challenges Distributors Will Face in 2010
1. The economy
2. Expense control
3. Consolidation of customers
4. Increased competition
5. Commoditization of products
6. Selling the value of the distributor
7. Finding qualified technicians
8. Margin pressures
9. Retaining employee morale
10. Rising healthcare and benefit costs

Ten Trends Distributors Believe Will Occur in 2010
1. Continued consolidation among suppliers, distributors and end-users
2. End users will increasingly look to robotics to automate their operations
3. Introduction of new power sources, such as hydrogen fuel cells and lithium-ion batteries for material handling equipment
4. Internal office computer technology, software and telemetry improvements
5. More stringent emissions regulations
6. Growth in third-party logistics companies
7. Customers seeking single-source suppliers
8. Consumers’ continued focus on going green
9. Changing composition of available customers in the market
10. Emphasis on safety and ergonomics for end-user employees

Ten Predictions Distributors Are Making for 2010
1. The industry will have fewer, larger players in the distribution channel.
2. End users will do much more of their purchasing online.
3. Automation for customer applications will take a quantum leap.
4. RFID will be mandatory.
5. Manufacturers will do more direct selling as they look to cut costs.
6. Government oversight will increase, particularly with permitting.
7. Warehousing will replace manufacturing as the top market for material handling equipment.
8. Customers will demand faster response.
9. Fewer operators will become the norm.
10. The industry will move away from engine-powered lift trucks to other solutions, specifically AGVs and robotic equipment.

Ten Ways to Succeed Distributors Have Identified for 2010
1. Make it easy for customers to find you.
2. Spend time with customers to build relationships.
3. Offer new products and services.
4. Expand your facilities and personnel.
5. Improve internal processes and procedures.
6. Sell the added value of distribution.
7. Concentrate on the aftermarket.
8. Focus on training.
9. Restructure your business development teams.
10. Purchase more inventory.