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Posted October 27, 2015

Distributors who price low, take sales and make more money

The title, upon first glance, seems an oxymoron. The prevailing profit logic in distribution has been to capture as much value as possible in pricing, sell solutions wherever possible, and keep a lid on expenses. Distribution is an uber-mature industry with most sectors going back over 100 years. Everybody knows, more than less, what everybody knows.

While distributors pore over PAR reports, review rebate income ad nauseam, and trade profit outlooks with their non-competitor peers, there is a class of firms that are quietly mounting a revolution outside industry norms. They offer a low price, grow sales at a pace often much faster than the industry average, and are becoming threats to established distribution firms. They are called Transactional Distributors and several have developed national footprints in the past few years. They will, if they continue to sprout up and grow at their current pace, change the industry.

Click this link to read the full white paper by Scott Benfield of Benfield Consulting.

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