Distributors Should Build a Moat to Keep Customers from Amazon

Distributors Should Build a Moat to Keep Customers from Amazon

As Warren Buffet famously said, “A good business is like a strong castle with a deep moat around it. I want sharks in the moat. I want it untouchable.”

The adage is as true now as when the Sage of Omaha first introduced the concept of an economic moat nearly two decades ago. Trouble is, most distributors believe their moats are deeper, and more shark-filled than they really are. 

With new competitors, Amazon Business, and a major demographic shift, distributors must realistically identify their moats, and use innovation and technology to create new moats. But innovation, particularly technological innovation, is not easy for today’s distributor. The processes, systems, and people that have made most distributors successful to date are exactly the things that will prevent a distributor from embracing new innovative ideas. 

Difficult as it may be, though, as Amazon grabs an ever-growing share of ecommerce revenue, wholesale distributors today are recognizing the need to fight back – and to build a truly effective moat around their customers to keep them from straying.

And while technology in the form of ecommerce competition has become a threat to many distributors, that technology can also become their strongest ally. That’s because one of the most effective means distributors have for retaining customers is automated inventory replenishment – the kind eTurns Track Stock offers. 

A weakness: Amazon does not yet provide businesses with an automated replenishment app for repeat orders

Track Stock provides one tool that manages all your customer’s supplies and automatically triggers replenishment, which means your customers won’t experience another stock out. Amazon may ship orders quickly, but even they don’t excel at demand-based automatic replenishment of repeat orders. But most importantly, when replenishment inventory keeps arriving at your customers’ doorstep without requiring them to log on to a computer to reorder it, those customers won’t be poking around on any sites where they could price-shop. And no distributor wants to compete on price. 

What distributors today should be competing on, and what builds customer loyalty, is service, product satisfaction, and anything you can do as a distributor to make that customer’s life easier.

eTurns TrackStock and its barcode scanning capabilities help a distributor’s customers re-order inventory 10x faster than if they were to do it manually or through an ecommerce site like Amazon

Automated inventory replenishment accomplishes that, too. The eTurns TrackStock App and its barcode scanning capabilities help a distributor’s customers re-order inventory 10x faster than if they were to do it manually or through an ecommerce site like Amazon. By optimizing their inventories with eTurns, those customers say they reduce inventory levels by up to 73%.  And if you’re the distributor who makes TrackStock part of their business, the credit for all that will be yours. No wonder distributors tell us that eTurns helps them increase same-customer revenues by 30%. 

Being proactive, with tools like eTurns TrackStock, is the best way distributors can protect themselves from losing money and business to competition, or to e-commerce. And that’s how they can win in today’s market.

The bottom line is, the more replenishment can be automated, the deeper, wider and more effective the moat around your customer.

But, really there is no need for a moat. Because the customer will be so happy with you that they won’t even try to go away.

Rock Rockwell

CEO, eTurns


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