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The Wall Street Journal has a report about how Amazon and other online retailers are disrupting yet another business sector - industrial supplies.

According to the story, “As part of its business-to-business marketplace offering, Amazon.com Inc. now sells everything from light switches to hydraulic valves, and last month boasted it had one million customers across fields that also included health-care and office supplies. Amazon is joining a host of online sellers shaking up the roughly $130 billion U.S. market for items that keep factories humming and the plumbing working. They threaten a business largely still conducted via salespeople working out of local shops and national distributors that cater to large businesses, as customers are lured away with instant comparison shopping and free delivery.”

The story goes on:

“While parts accounted for a sliver of Amazon’s $136 billion in sales last year, the company is a proven disrupter of industries ranging from apparel to video to cloud-data services. Like retailers before them, industrial suppliers risk getting caught in a race to the bottom on prices, where online-only sellers have an advantage because they don’t maintain costly networks of branch offices and salespeople … Amazon is shaking up the traditional format for selling industrial parts by allowing distributors and manufacturers to sell products directly to businesses on its marketplace, eliminating middlemen and often undercutting traditional local suppliers. It also offers one-click ordering and transparent pricing, features that are the norm in online retail but less common in the industrial world.”

But it may not be that easy, and distributors have no intention of going quietly:

“Some distributors have a head start compared with Amazon. Many have offered next-day delivery for essential parts for decades and are experts in fulfilling orders fast, from warehouses around the country. Even smaller firms like United Electric Supply, a regional distributor based in New Castle, Del., are adding services like order tracking and same-day delivery … Distributors also offer extra services, which would require significant investment from Amazon to match. For example, United Electric Supply will work off a customer’s blueprints to determine the parts needed to build a $10 million electrical system …. Grainger embeds employees in manufacturing plants to manage inventory … (and) MSC cuts or dyes metal to meet customer specifications.”
KC's View:
The lesson here is simple.

Nobody is safe. Nobody.

But there’s another lesson, and that comes from how these industrial supply companies are competing - with better service, and with processes that take them beyond traditional operations and stress relevance. That’s a great start when it comes to being really competitive.