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CEO-BLOG

Premium Distribution

23.05.2017
Ulrich Spranger
Ulrich Spranger
A trend is making a comeback:

Does shipping logistics only have to become cheaper (and automatically poorer, as a result), just because Mr. and Mrs. John Q. Public feel like paying very little for it?
That's no longer true.

The more we invest into our premium logistics (24-hour warehouse operation, more employees, new types of quality control, continual technological upgrades), the clearer the results are: much less damage during transportation, packaging mistakes drop to much lower levels and there is an enormous increase in speed. Combined with the best parcel services and shipping carriers, this ultimately leads to a reduced workload for the customers. Hard cash!

And look here: performance is rewarded. We enforce (of course, still economical) flat-rate shipping charges because we, for example, are also able to serve end customers on behalf of our resellers, the idea being "order and forget" - with colour-printed "original" reseller packaging slips right up to individual packaging tape.

For free shipping elsewhere you get pseudo parcel services who heartlessly toss the boxes into the rusty van when loading it, and who then drop the well-shaken box at the customer's feet. What a treat for the electronic device inside.

On a side note, a part of "premium" also means that sales employees not only register articles, but they also know which product is needed. When we test the competition the answer comes back to the tune of "I cannot help you without an exact article number." Pitiful. But things can turn funny if you ask the "right" questions. I can amuse myself for days like this. Such as during a discussion about a particular receipt printer, when asking "Just how big is it?" or "Isn't that the neon yellow device?" The answer came back "Yes." – to both questions. :) So, that speaks volumes about the training level of the other person.

And because of this we are finally seeing slightly growing profit margins in the channel. Of course there are still customers, let's call the company "Audacious Computing", who expect that we deliver with a negative margin. Oh, and even better that we take care of his 30% returned goods. But the best of all would be to send (in advance) free-of-charge demo devices directly to the end customers: but right now, please! That would mean that we are not a "Premium Distributor", but rather a dumb distributor.

We prefer to work together with the 99% of reasonable resellers, and grow together. "Audacious Computing" might be causing a competitor of ours losses, but even they would realize that the supply of distributors is not limitless.

Apparently, the competition is of the same opinion as I am: Auto-ID and POS is not a broad line topic, but must at least be part of a separate department, and therefore always incurs higher costs. We cannot become solutions providers; that is our customers' job. We can, however, continue to push towards being a part of our customers' solution, and contribute as much as possible to achieving this.
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