Wholesaler, Solution Provider, Logistics Driver or Knowledge-based Distributor?<\/strong><\/h3>\n

When Frank Hurtte founded River Heights Consulting back in 2005, he had a vision:<\/p>\n

“To provide a resource for distributors seeking to better position themselves for their territories, their suppliers and their future.”\u00a0\u00a0<\/strong><\/em><\/p>\n

While Frank\u2019s vision was crystal clear in his own mind, others wondered.\u00a0 The term distributor was an intellectual stumbling block.\u00a0 The word distributor applies to so many different business models; ranging from Fortune 500 companies like Genuine Parts ($16B) and Grainger ($10B) down to some interesting sub-$5 M specialty distributors with an owner and a six-person staff.\u00a0 Clearly, a better term was required.<\/p>\n

Early on Hurtte coined the phrase \u201cKnowledge-based Distributor\u201d to better describe the kinds of people he calls \u201cour kind of distributor.\u201d<\/p>\n

What is a Knowledge-based Distributor?<\/strong><\/h3>\n

Quoting a 2014 article from The Distributor Channel blog, Knowledge-based Distributors could be characterized by \u201cDeep product expertise, product specialists, customer-centric engineering and solution selling is their mode of operation.\u201d\u00a0 Stating it differently, Knowledge-based Distributors don\u2019t sell an assortment of little brown boxes, rather they sell products that are surrounded by their own veil of special know-how and expertise.<\/p>\n

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Knowledge-based Distribution is Different<\/strong><\/h3>\n

While sharing many similarities with their brethren in other forms of distribution, Knowledge-based Distributors have some marked differences:<\/p>\n

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• Selling is an active verb<\/u> \u2013 While both logistics distributor and Knowledge-based Distributor organizations \u201csell\u201d products, there is a difference in the approach.\u00a0 Distributors operating in the logistics model tend to view selling as the processing of orders.\u00a0 Think of Walmart.\u00a0 America\u2019s number one retailer \u201csells\u201d Coke products, but they do nothing to encourage a customer to buy Coke over Pepsi, RC Cola or even their house brand of Sam\u2019s Choice.\u00a0 Knowledge-based Distributors take an active approach; partnering with a smaller group of suppliers to purposefully convert business from competitors or find new applications.<\/li>\n
• The cost of selling is higher<\/u> \u2013 This active selling described above extends even further.\u00a0 Knowledge-based Distributors invest heavily learning not only products but the application of products.\u00a0 Extending further, Knowledge-based Distributors spend the time and effort to understand the nuances of their customers\u2019 processes.\u00a0 One such distributor noted, \u201cIt is our goal to know more about some very specific slices of the customer\u2019s manufacturing environment than their own internal people.\u00a0 Only when we reach that point can we provide the greatest value to our customers.\u201d<\/li>\n
• Expertise is a\u00a0rare commodity<\/u> \u2013 Engineers, or those with qualified experience, are becoming more difficult to find with the passing of each year.\u00a0 Further, the kind of expertise required for the Knowledge-based Distributor is not found with first-year engineering students.\u00a0 Similar demographics impact our customers so the demand for the distributor\u2019s expertise is continuing for the foreseeable future.<\/li>\n
• Service provided to the customer is more extensive<\/u> \u2013 It\u2019s hard to find a distributor of any kind who does not tout some kind of value-added service.\u00a0 For the logistics company, this may come in the form of expedited deliveries, put away services and stock replenishment programs.\u00a0 Knowledge-based Distributors, however, provide services which often interact with the customer more extensively.\u00a0 In the case of automation and technology products, the distributor may provide services that supplement or replace those once provided in-house.\u00a0 The more complex and mission-critical the products, the greater the likelihood that distributors are involved long before and after the actual sale is made.<\/li>\n
• Services are often fee-based<\/u> \u2013 The cost of providing extensive technical services has come to the point at which the Knowledge-based Distributor must recoup dollars tied to the services.\u00a0 Knowledge-based Distributors have discovered there are few others in the market space with their unique understanding of products, applications,\u00a0and customer needs.<\/li>\n
• Smart Supply-Partners realize savings too<\/u> \u2013 Many years ago River Heights Consulting developed a matrix outlining who did actual work tied to serving customers both pre and post-sale.\u00a0 Hands down Knowledge-based Distributors absorb many costly activities conducted during the sales cycle.<\/li>\n<\/ul>\n

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  Read – The Future of Knowledge-based Distribution<\/strong><\/span> Click Here<\/a><\/h3>\n

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