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A game-changer for distributors?
19 March 2015
Ignore if you will the futuristic stories about delivery drones and TV deals to make shows, Amazon’s entry into the world of B2B distribution could well be their most disruptive move yet – and almost certainly the one that will have the most impact on the cleaning industry, Keith Baker, ISSA's director of EMEA services, argues
Speaking with cleaning industry friends and colleagues in the US recently, the topic of AmazonSupply has been uppermost in their minds. AmazonSupply, is an e-commerce site targeting the wholesale and distribution market. When it launched, Amazon boss Jeff Bezos specifically mentioned janitorial supplies as one of the cornerstone categories for the new service.
At the time of writing, there were 34,736 janitorial and sanitation products available on AmazonSupply including cleaning chemicals, tools, floorcare products, odour and drain maintainers, paper products, restroom systems and waste receptacles. A quick scan of products on offer revealed brands by some of the most well-known and revered manufacturers through to smaller, young businesses exploiting this new route to market.
At present AmazonSupply is just serving the North American market and while feasibly a British business could buy from that site, the import taxes that would be levied lessen the appeal and advantage to negligible levels. However the roll-out of AmazonSupply globally – as happened with Amazon’s consumer business a decade or so ago – seems inevitable. And given that the UK is Amazon’s second largest market after the US, I believe that AmazonSupply will be on our shores sooner rather than later.
Amazon is an enterprise without equal and its looming presence will be alarming to some. However one thing that I know about the UK cleaning industry is that it boasts some of the most talented, committed and entrepreneurial people you are likely to find anywhere. When trends and market forces dictate or when a new competitor emerges, that’s when this industry can be seen at its finest. When it comes to this side of the Atlantic, AmazonSupply will provide welcome competition; a catalyst for some to further raise their game and a trigger for others to re-examine how they buy and sell cleaning products.
Prior to ISSA, I used to run a cleaning and hygiene supplies distribution business. If I were still in that line of work, I would be looking to build on the kind of deep knowledge, consultative skills and industry expertise that the best distributors already use to add tangible value to their customers’ businesses. That is a clear USP that e-commerce box-shifters like AmazonSupply can never offer.
I also believe that AmazonSupply cannot, and probably would not want to, tackle every customer’s needs in our complex, highly segmented industry. Many of the products that we use are likely to be too difficult for Amazon to warehouse and ship or require specialist handling and after-sales support – unlike a book or DVD for example. But they will be there in some way or another and their offer will appeal to some.
In a free marketplace such competition is to be embraced whether it is from AmazonSupply or from office or industrial supplies companies for example who are now successfully integrating a limited variety of cleaning products in their range. I would also urge end customers – cleaning contractors or in-house cleaning professionals – to think carefully about how, and when, they purchase products. While it is tempting to compare initial purchase prices and opt for the lowest, what really counts is the lifetime cost or the actual cost in use. At a time when the value of cleaning is being redefined as an invaluable investment in better health, a better environment, and a better bottom line for your business, is it really prudent to risk all that for saving a few pence here and there on the purchase price?
For consumers, beyond price comparisons, the other benefits of Amazon or other e-commerce platforms are the convenience of delivery to their home and the relatively short delivery lead-times for many items. When it comes to this business though, distributors of cleaning and hygiene products already offer the convenience of delivery to your location and frequently can match or even beat the delivery timescales of e-commerce operators especially when given a little advance notice by the customer!
I look forward to seeing how the change in distribution models plays out and if you think I am overstating the potential impact of AmazonSupply, remember what the advent of Amazon did to your local, independent bookshop some years ago. Whatever your views on the future of cleaning products distribution I would love to hear them. I will be at the Cleaning Show at London Excel (10-12 March 2015) and I would be pleased to meet you there. Also, the ISSA Europe Newsletter during February and March has a small survey, where we are asking if you see these developments as a threat or an opportunity for your business. Please take part at www.issa.com/europe