Grace Slick's emphatic rant to “feed your head” in the 1960s-classic “White Rabbit” by Jefferson Airplane might not seem to have much to do with the electrical wholesaling business. She sang about a world where Alice in Wonderland was 10-feet tall and chess pieces talk, and the tools she used to inspire these visions were of questionable legality and sanity.
But the search for methods to stretch your mind and “feed your head” is a noble quest. Year after year, I have found attending the annual conference of the National Association of Wholesaler-Distributors (NAW), Washington, D.C., helps me do just that.
The conference offers insight into industry trends and political updates from Capitol Hill, as well as networking opportunities with distributors in the retail, commercial, industrial and health-care fields that sell electronic, MRO supplies, pharmaceuticals, janitorial supplies, pet supplies, propane, health foods and an astounding variety of other products.
NAW lobbies Congress for business-friendly legislation for more than 100 distributor trade associations. Dirk Van Dongen, the association's president, is a well-connected player in Washington, D.C., and counts President Bush, Vice President Cheney and others in the administration as personal friends. On the legislative front, this year's NAW meeting was particularly interesting because of the commentary on the upcoming presidential election provided by several legislators and a foreign policy analyst (see “NAW Update,” page 16).
But to me, the most valuable information at the NAW conferences are the research studies published by the Distribution Research and Education Foundation (DREF). DREF has produced more than 50 studies since 1982. Its best-known series of studies, “Facing the Forces of Change,” is published every three years, and the latest version will be available next month for purchase at www.naw.org.
This year's NAW meeting offered more than the usual amount of mind-stretching information because of the sneak preview of this study by its author, Adam Fein, president, Pembroke Consulting Inc., Philadelphia. In a release publicizing the new study, Fein says, “Our report documents how the traditional ways distributors make money and grow will be rewritten by the combined influence of customer buying behavior, emerging competitors, and the proliferation of technology in the supply chain. However, distributors have many new opportunities to put themselves on the road to renewed relevance and increased profits in the years ahead.”
Part of the beauty and challenge of these studies over the years is that the findings apply to the various NAW distribution industries in different measures. Figuring out how the forces of change affect your industry in general and your business in particular requires close reflection. Fein sees four broad trends for distributors to analyze: customer self-service, strategic sourcing, fee-based services and pricing, and logistics and fulfillment. After reading the study, you and your company's management team can use the following questions to get your analysis of these trends rolling:
Customers use the Web to get much of the technical product information that distributors' salespeople have always provided. Will they want or need to see a distributor salesperson as much in the future? If they do want to see a salesperson, what services will they expect that salesperson to provide?
How can a distributor fashion customized packages of services for key customers that will help them run their businesses more profitably?
How can distributors fine-tune job-site delivery to make themselves even more valuable to customers?
Can a distributor package or palletize orders by room, floor or building for customers to save them time? Will they pay for this service?
Contractors are notoriously weak in bookkeeping, inventory/warehouse management and marketing. Can distributors develop a fee-based model to offer these services, which often are their strengths?
Somewhere in your answers to these questions you will find the nourishment to feed your head with the strategies that can ensure a profitable future for your business.