This issue includes an interview and articles on global market changes, private label strategy, a major international acquisition in the office products distribution sector, an analysis of ESOPs, and how one distributor is leveraging environmentally-friendly product offerings.
My first thought regarding this mix is how different distribution markets look today. Green”products were not part of the line card ten years ago. But like the happy lobster feeling the temperature of the water rising nicely, maybe my memory isn’t perfect when it comes to incremental changes. So I drew some help from the MDM Archives.
In 1998, suppliers and distributors were dealing with major structural changes in channels with the growth of integrated supply and impacts of consolidation. This industry was swept by a wave of consolidation. National and regional distributors were building out platforms. Roll-ups, alliances and strengthening marketing groups emerged to give independent distributors options to counter the consolidation trends. This publication was printing (as opposed to posting) articles like A Primer on IPO Roll-Ups, not ESOPs as an exit or growth strategy. It’s an indication that as market conditions change, growth and exit strategies emerge to offer appropriate options.
From an April 1998 issue of MDM: “The most consistent observation of the last few years is that there is no longer any neat little boxes. It is harder to define markets, customers and even distributors as traditional lines have blurred across product segments and alternate competition has grown.”
In this column ten years ago exactly (Jun. 25), I noted: “If you think distribution hasn’t joined the global economy, you’re more the exception than the rule. Mexico is offering a strong market for distributors, and more are developing export businesses or serving customers’international operations.”
North American distributors have built out strong international capabilities, but in ten years we have heard a lot more about manufacturing production moving offshore, the flow of products into (not out of) North America and foreign ownership of distribution here.
Ten years ago, distribution markets were chaotic, confusing and fragmented. They still are, only on a global scale with different threats and opportunities. But, like politics, I’d argue that all distribution is local. It is still the customer relationship, regardless of where it is or where products are sourced, that defines the value of distribution.
Commentary: Green, Global and the Pendulum of Growth
My first thought regarding this mix is how different distribution markets look today. Green"products were not part of the line card ten years ago. But like the happy lobster feeling the temperature of the water rising nicely, maybe my memory isn't perfect when it comes to incremental changes. So I drew some help from the MDM Archives.
In 1998, suppliers and distributors were dealing with major structural changes in channels with the growth of integrated ...
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