During the last four months, most distributors have experienced the level of volatility normally encountered in or 10 to 20 years. Living with change is like dealing with the weather: We’re all affected by it. We might take advantage of it opportunistically. We try to predict it. Sometimes we like it and sometimes we hate it. Regardless, change is a major factor in our environment, and it’s a lot bigger, less predictable, more disruptive and much more powerful than we are. Similarly, no one can exaggerate the effect that the COVID-19 pandemic has had on our businesses, our suppliers, our markets, our customers, our lenders, our investors, our employees and our profits.
In the midst of change and chaos stand the management and staffs of distributors of virtually every product, component or support item needed in the developed world. Some distributors have thrived, whereas others have had disastrous results. Do their results capture any secrets?
Feeling the Effects
I have unscientifically captured the causes and effects that have screamed most loudly to me. I will share my best guess, loudest examples, “wow” surprises, and, most importantly, the lessons that I think I am learning. I hope that you will also share what you have learned, as well as your opinions and responses to my gut feelings.
Also see: “Today’s Litmus Test for Distributors.”
At a top-line level, these are the lessons I see distributors dealing with:
- Understanding how quickly markets, revenues, capabilities, issues, competition and customers can change significantly without any typical types of warning.
- Changes in customer and consumer demand; what and how our customers (and people in general) purchase. What’s coming next?
- Finding out how much can be done at home with a computer and a telephone.
- Retail sales channels dramatically changed: no trips to the mall, replaced by internet purchases and retail home deliveries.
- Explosion in transportation volatility: availability, mode, price, popularity.
- Reactive changes and attitudes to imports and exports.
- Learning by experience about which suppliers, customers, service providers, investors, competitors, and many more are:
- most consistent, or most inconsistent
- reliable or stable
- ready to handle chaos
- needy or financially solid
- flexible, responsive, in control or out-of-control
- people/organizations we can count on, or people/organizations that count on us
- effective managers, or totally swamped
- … and many, many more. Now, if I can only learn how to predict them.
- Wondering when the next foot is going to fall.
- Wondering what could have been done to avoid the chaos distributorships have felt, or perhaps wondering what distributorships could have done to take better advantage of the chaos that affected suppliers, competitors and customers.
- Thinking about how to plan for the next disruption.
What are the high points and disappointments that you and your business have encountered? What’s your outlook? What tools and protections have you added to your defenses? What has worked well for your distributorship? Please drop me a note, and I will update my observations and sincerely acknowledge you and your insights. No doubt, we are all in this together, and our best benefit is sharing our opinions, experiences and actions.
Robert Sabath is head of distributor practice at Transportation and Logistics Advisors, LLP. Please reply with your comments, thoughts, observations and criticisms to [email protected]