Distribution is a competitive business with thin operating margins. The difference of a few percentage points on a product can make the difference between a sale and losing a sale.

Channels add value to their members; more often than not this is accomplished by reducing supply chain costs while improving quality. This goal is usually accomplished by technology.

Many manufacturers open up direct sales to counter a competitive threat or serve a channel that distributors are not interested in pursuing. However, if they do so without researching their channels and end users, and lack a solid financial evaluation of the channel costs, their efforts are usually unsuccessful.

In our final installment in this series, we examine additional strategic considerations in the salesforce change for Sioux Falls Supply.

In our previous installment, we reviewed the salesforce analysis completed by CEO Gordie McGrath on Sioux Falls’ outside sales effort.

In our last installment, we reviewed the Change Management Process for Digitization of the distribution firm. We now apply the process to Sioux Falls Supply for their use in changing the firm to take advantage of their online technology.

In our first installment, we reviewed the “ugly” numbers of distributors as online commerce grows; only 2 in 10 distributors show sustainable online progress.

As e-commerce and digitization of PHCP channels increases, the need for yesteryear’s complement of sellers and branches is lessened.

As technology makes search and ordering easier, the salesforce will be driven to deliver new and different value streams. While new sales models require different management and technology supports, they will, in many areas, supplant generalist sales efforts.

In our previous installment, we discussed the types of selling that will become prominent as digital commerce grows in distribution.