How Pricing and Inventory Are Shaping 2022 - Modern Distribution Management

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How Pricing and Inventory Are Shaping 2022

John Gunderson has one of the most extensive networks across distribution verticals, including electrical, datacom, general-line MRO and construction supplies. In a new podcast, we discuss how 2022 might shape the ways executive teams manage inventory, pricing, margin expansion and digital.
How Pricing and Inventory Are Shaping 2022

“Inventory, inventory, inventory.” When I asked epaCube Vice President John Gunderson in our latest podcast what he’s hearing on how 2022 is shaping up, he didn’t hesitate with that answer. “I think the inventory issues are going to straighten out a little bit this year,” he said. “A lot of our partners and clients were able to, if they had a good inventory position, they were in a strategic position where they had it and their competitors didn’t. They were able to get paid more for that inventory and go take share. I think as inventory straightens itself out, it will go back to the more what I would call normal distribution dynamics, where you’ve got to have inventory, but you also have to have it priced right.”

Gunderson has been a part of sales and marketing leadership teams over his 20-year career. So it was natural after stints at leaders like Crescent Electric, Anixter, HD Supply and EIS — as well as three years heading MDM Analytics — that he’s now helping distributors with his passion for smarter pricing and operational analytics in his role with pricing optimization provider epaCube.

With a career start carrying a bag, Gunderson believes relationship selling is still important. “But you’ve got to arm your relationship sellers with data and analytics,” he says. “I think analytics, analytics, analytics on what they should be selling, what they’re not, maybe where they’re underpricing their product, or their value prop. And also where there’s opportunity to make pricing adjustments to grow share. I think that’s really key. And right now, the tools are so great out there, whether you’re a large distributor or a small distributor, you can take advantage of analytics, and provide better analytics to your sales team.”

Conventional wisdom says that large distributors with deeper pockets have grown share in a downturn by putting more salespeople into territories. Gunderson added a few finer points to cut through that generalization. “I think the winners in 2022 as a large distributor are those that are maybe expanding their channels or making smart acquisitions,” he says. “The large distributors, in general, have really good analytics and data groups to fuel that growth. So I would say a large distributor that’s looking at expanding their channels, or maybe just product sets within the channel they serve, and making smart synergistic acquisitions, are the ones that are on a really gain share and profit growth timeline and opportunity more than anyone else.

“For small distributors, I think those that embrace pricing optimization, sales analytics, a decent e-commerce platform, and go out and arm their sales team with strong analytics are the ones that are going to take share. Most small distributors are really good at managing inventory or have a pretty good inventory position. I think the small distributors that are embracing analytics and powering their sales team with that I think are the ones that are going to grow.”

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