To compete more effectively against national and big-box competitors, distributors should view customers not by which products they buy, but instead by which services they want. In Distributors Respond to the Big-Box Challenge, Mike Marks says that some customers are buying a reliable source of supply.

Some are buying the ability to bundle, convenience, capital services, pre-sale advice or post-sale support.

Segmenting customers this way will help distributors understand the customer better and provide differentiated value propositions.

Identifying the type of service customers are willing to pay for is also important, according to Kathleen Durbin, CEO of General Industrial Tool & Supply.

“We could see a trend where distributors start making more of their money off of services as opposed to reselling product,” says Ted Stark, president of janitorial supplies distributor Dalco Enterprises.