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 Disruption in the Channel
Attention manufacturers and distributors,
if your competitor had a sustainable 35% cost advantage, what
would you do?
> Close up shop.
> Find out what they were doing and do
it too. (If it's not too late.)
> Offer more and better sales
promotions.
> Stress value-added services.
If you think the question and multiple
choice answers are farfetched, don't. A new book from Scott
Benfield and Steve Griffith, Disruption in the Channel,
examines the effect of foreign off-brands on distributors
and manufacturers in durable goods channels. Their findings
include:
- An average 35% price advantage in
buying off-brands for distributors
- Approximately 20% of channel inventory
is off-brands
- Many manufacturers and distributors
are in denial about the power of off-brands.
- Domestic manufacturing is investing in
low value added services when competing against off-brands
- Domestic manufacturing and brands are
poised to lose significant share.
- Distributor/manufacturer relationships
will become strained in coming years
- Distributors will have to
significantly alter their operating platform to adjust to
lower prices in the channel
- New buying entities including
importers will grow and add increasing value to off-brands
The influx of foreign off brands into Durable Goods Channels
will affect all members of the buying channel. Disruption
in the Channel is the exciting new book by Scott
Benfield and Steve Griffith depicting the titanic changes that
will occur due to low cost/ high quality off-brand imports. Mr.
Benfield and Mr. Griffith, with a combined 50 years managerial
and executive experience in durable goods channels, performed
hundreds of hours of interviews and surveyed close to 200
distributors (most of whom were executives) for their plans in
importing off brands. Benfield and Griffith have statistically
validated their research for the close to 2 trillion dollars
worth of goods and 200,000 distributors in durable goods
channel. Their findings include significant price breaks for
off-brands, high quality products and support services from
foreign manufacturers, a domestic manufacturing base that is in
real trouble in their competitive offerings, and distributors
who have to undergo many changes when buying off-brands or risk
losing out.
For more information go to
www.disruptioninthechannel.com. |
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