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Posted October 30, 2014

Big Data, or Not?

Are rank and file wholesalers losing the battle for the e-sale?

by Scott Benfield

E-commerce has dominated opinion and research pages of the $5 trillion wholesale sector for the last several years. Starting with AmazonSupply’s announcement approximately 2 and a half years ago, the wholesale sector has been abuzz with research, thought pieces, and prognostications on the future of the thousands of independent and largely family-owned firm(s).

Most analyses have focused on the cost advantage of an e-commerce entity over a traditional fullservice, brick-and-mortar wholesale firm. The cost advantages, to be sure, can be substantial; however, there remain only a small number of Amazon-Supply type firms (transactional distributors) who have made a successful go of it. These firms have limited brick-and-mortar locations and little sales support.

They can often undercut traditional full-service firms’ pricing by 10% or more. After reviewing the competitive landscape, evidence exists that the big winner in the wholesale sector may not be the transactional firm but a much more well-known entity; the billion dollar behemoth replete with big data.

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