Amazon can't compete with distributors when it comes to product knowledge, according to Jim Tompkins, founder and CEO of supply chain consulting firm Tompkins International. The pervasiveness of customer showrooming though, often means Amazon doesn't have to, Tompkins says in the latest episode of MDM’s Executive Briefing, out now.
“The distributors have inside sales and outside sales that really know their product … so there’s a wealth of information that distributors have that Amazon doesn’t have," Tompkins says. But Amazon isn't trying to compete on this level, he says, because customers that need information before buying from them can get it elsewhere.
Even though customers might sometimes, out of a sense of obligation, buy from the distributor the first time around, more are using distributors for research. “The customers will call the distributors, get all the information they need, and then turn around and buy the product from Amazon,” Tompkins says.
Tompkins recommends distributors carefully evaluate their business models in response to showrooming. “Is your business model a distributor of product or a distributor of information? If it’s a distributor of information, you’ve got to figure out how to charge for it, because the customer’s not going to pay more for the product just because they got the information from you.”
Tompkins says distributors need to keep an eye on Amazon in this month’s episode of Executive Briefing. He also offers five steps distributors should take to fight back against Amazon. Watch the episode now.
This episode also features a 7 Minutes With interview on how end-user needs are driving changes in the relationship between manufacturers and distributors with Chester Collier of Walter Surface Technologies.
Watch part 1 of this interview below or view the full program at www.mdm.com/executivebriefing.
