This month, PCR’s anonymous retailer urges more distributors to offer smaller stores better value, and looks at the evolving supply chain.
"In my experience there are still some distributors that don’t have much to offer independent retailers in terms of value.
"They are only interested in shifting stock to larger traders who may have already negotiated deals with the manufacturer.
"Some distributors lack product knowledge and can’t offer anything more than what can be Googled. Some have no experience with the products they are selling and leave it to the retailer to figure it out – but indies don’t have those kind of resources to waste.
"Online, social media, blogs and review sites have ultimately empowered the customer, making it easier for them to make an informed decision. And this is great. But, by then you can only compete on price.
"So if some of these disties can’t offer indies value, even on price, then what is the point of them being around? If you think it’s for authorised stock and RMAs, think again. All online retailers offer a returns service – it’s the law. Grey/unofficial stock is not illegal, consumers don’t care and the online retailers will take the hit.
"They even have trade sections and account managers that have in-depth product knowledge and tight links to manufacturers. With economies of scale to their advantage, there is no way indies can compete, especially on magical negative margins.
"What also adds salt to the wound is the complacency of some distributors and their terrible treatment towards smaller indies, just due to their lack of buying power.
"With the mentality of ‘everything coming down to price’, this decline was inevitable. Worse still, it has been accelerated by the recession and the fate of most indies will soon go the way of the once local greengrocer. However, I believe it’s even worse for distributors as this downfall is of their own making.
"The whole supply chain is evolving and consumers are leading the march – there is no room for noise and complacency in the marketplace. Just look at the recent success that Apple had.
"However, with all this doom and gloom there is hope for a lot of good indies to evolve, and in my opinion this does not require too much investment. If disties as a majority can show that there is real value in what they do, then I am happy to change my mind. But as it stands today I only see room for a few good disties, and online retailers as brokers to small indie tech businesses."