Direct Selling: Manufacturers, Meet Your New Customer

The answer to selling direct without jeopardizing growth among your existing distributors is understanding what the end-user wants and developing an evolutionary strategy that diversifies revenue streams.

Are you ready for the next wave of disruption?

Learn how manufacturers are diversifying their revenue streams to leverage disruption for growth:

• Gain insight on creating a successful direct sales strategy
• Lead your leadership team through the process of developing a direct sale strategy.
• Discover why end users are seeking to purchase directly from manufacturers.
• How to implement an evolutionary (crawl/walk/run) plan to scale direct sales.
• How to achieve leadership alignment on strategies for investment, resources and capability development.

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Video Transcript

J Schneider: As you probably noticed already, this is not your typical webinar events. As we work through the next hour, we’ll be using the whiteboard and visuals to share our perspective on this important topic. Today’s session is about the future, how manufacturers can sell more direct effectively. And for those manufacturers who are not selling direct today, how to capture your end users demand while maintaining your existing channels.

J Schneider: Today, we’re going to break down our discussion into three areas, current market, how to make the right decision for your business and the tools to implement and expand your direct to end user sales strategy. Throughout our session today, we’ll also discuss the results of a recent survey that was completed, which I believe you will find useful and informative, as it shows how manufacturers are addressing end user demand and to ensure they can maximize their own total addressable market.

J Schneider: At the bottom of your screen, you’ll see a Q&A panel. Please type in your questions and we’ll answer them at the end. With me today is James Dorn, President and CEO of the Dorn Group to give his unique perspective on the market, industry trends and what future expectations look like.

James Dorn: Hey, thanks, J. Yeah, this topic of direct selling is a timely one, isn’t it?

J Schneider: Yeah, it is.

James Dorn: Yeah. I mean, we’ve been fielding a lot of questions from manufacturers. And what the manufacturers are asking us is how do we handle this growing amount of end users who are literally banging on our front door, asking to purchase products directly from us.

James Dorn: So, what we’ve done. And what we set out to do here was really put some answers behind this topic. And it’s not a new topic. This is an age old topic that we just decided to say, “Hey, let’s just put some more data and substance behind it.” So, with this survey, what we’ve done is we’ve collected a larger set of respondents and we tried to substantiate what we’ve been hearing and seeing in the field. And a lot of what we’re seeing is COVID has been obviously a major factor into changing things over the last two years. And those factors aren’t really changing moving forward.

James Dorn: So, what we see from manufacturers is they’re taking this as an opportunity to just reset the current go-to-market strategy and trying to figure out how they may need to pivot in one direction or another, or just simply double down on what they’ve already been doing. So, we’re happy to share the results of our survey.

James Dorn: But we’re also happy to share some insights throughout the topics that we have prepared for today. And hopefully, this will help you manufacturers trying to prove your go-to-market strategy and maybe even you know help you come up with some tools and tips of reassessing your current go-to-market strategy.

J Schneider: Great. Thanks, James. Let’s dive a little deeper into our discussion today. As most of us operate today, manufacturers, customers, distributors really make up the primary of our ecosystem. This ecosystem has been around for decades and has served as the backbone of the company growth for almost all of us here today.

J Schneider: But before we dive into that, maybe we can share a little bit about some of our initial survey results with the audience.

James Dorn: Yeah. Great. Let’s dive in.

J Schneider: Yeah.

James Dorn: So, the first data slide that we have for you all today is we just simply tried to look at the go-to-market strategy models that manufacturers have. So, we want to understand the total, which models existed out there before COVID and which models are manufacturers considering post-COVID.

James Dorn: So, what you’re seeing here are two sets of data. The left side of the data you’re seeing are pretty equal representation of the sample here, and it’s basically a third, third, third, and I’ll explain what each one of those are. At the bottom, you have manufacturers who sell directly to their end users. That’s about 30, 35% of the sample here. So, that’s manufacturers that don’t sell through distribution, just directly to their end users.

James Dorn: The sample above that in green is manufacturers that have what we call hybrid go-to-market strategy. So, that’s they sell through distribution as one channel and then they also sell directly to end users as another channel, forming this hybrid go-to-market strategy. And then the top tier is more of the manufacturers who exclusively sell through distribution. So, this is what we call indirect go-to-market model.

James Dorn: So, what really surprised us here is when you look at the data on the left side and you compare it to the data on the right side, there’s a huge shift here, especially in that green band, which are manufacturers who are seeking to establish a hybrid go-to-market strategy. Now, this is still the same set of users here.

James Dorn: But what’s happened is it’s just shifted. So, that hybrid band has a lot of manufacturers who used to only sell indirect now wants to start selling through this distribution and this direct end user strategy. So, a huge shift there, probably a 78% increase, I think, in the band that wants to go from a hybrid go-to-market. And yeah, so 70% increase in that. So, big insight here.

James Dorn: I think the other factors, really, this is much smaller in size. But if you look at the manufacturers who sell direct, some of those manufacturers are now going to be moving into selling through distribution. So, they also creeped to the hybrid.

J Schneider: Yeah, you can see at the bottom of the chart there, right?

James Dorn: Yeah.

J Schneider: Going from 35 to 33, it tells you, hey, that balance. And we’re going to talk a little about balance later on in the session here.

James Dorn: Yeah, perfect.

J Schneider: But as they start thinking about, hey, maybe I need to balance my approach a little bit more versus being one side or the other.

James Dorn: Yup.

J Schneider: No, this is great insight. But I guess the question that we have is, does this really apply to me? How many times have you heard this? I’ve heard this dozens and dozens of times, even in the last month. And the question is, hey, that doesn’t apply to my company. Our customers don’t buy that way. They don’t buy the through the internet. They buy directly from my distributor or they buy through my reseller channel partner. Does this really apply to all the companies? I mean, if I’m an industrial company or a commercial company or a service company, does this really still work or apply?

James Dorn: Yeah. J, in short, yes. The data shows that that’s across a wide variety. But to that point, I mean, that’s human behavior. The first reaction people have to change is, does it really apply to me and to my business with my factors. We have all of these relationships. We have all of these users that we’re currently working with. The answer to your question is, yes. This data was taken across many different types of manufacturers from an industry standpoint.

James Dorn: So, we’re talking automotive. We’re talking commercial. We’re talking industrial. We’re talking chemical. And then from a product category standpoint, you’re equal spectrum. This is large capex machinery. This is tools. This is consumables. As I mentioned for chemicals, you get a large sample hair or wide sample we’ll say, and the data was pretty consistent across them.

J Schneider: Yeah, and 70% is a big number.

James Dorn: It is.

J Schneider: Right, that tells me that manufacturers are now looking at the market differently. And they’re saying we need to change.

James Dorn: Exactly.

J Schneider: And that brings us back to the ecosystem. And as you have end users and distributors and manufacturers here, this ecosystem has been around for a long, long time. This is not new to anybody.

James Dorn: I just want to know what this is, J.

J Schneider: Yeah, we’ll talk about that in a minute. But the point that we want to make here to start is that you start segmenting out your business. And let’s just call these guys direct. And this group here is that new buyer, and that new buyer says, “Hey, I want to buy direct now, or more importantly, I want a choice.”

J Schneider: And that’s really what they’re saying. They’re not saying I prefer only to buy direct or I only prefer this way. They’re saying, “Look, give me a choice.” In some cases, I may want to buy directly from the manufacturer. In other cases, I may want to still buy through distribution.

James Dorn: Sure.

J Schneider: But what they’re saying is, hey, maybe even three or four years ago, this buying group wasn’t this large. And this need or this demand wasn’t placed directly on the manufacturers, as we found in the survey results. Now, the other group is a group of buyers that says, “Hey, I want this the only.” And I said, “Hey, these buyers, I’m happy with distribution. My distributor serves me well. I have contracts and agreements. That’s how I prefer to buy.”

James Dorn: The bottle large end users prefer this, right?

J Schneider: Yeah,

James Dorn: Integrated suppliers. That’s not going away.

J Schneider: Correct. And this distribution network that is served from these manufacturers to this group is very, very important. It’s not to be diminished here in this discussion. However, this distribution group is also important here. Why is it important? And this is where we want to dive in a little bit deeper.

J Schneider: While the direct end user says, “I prefer to buy direct from the manufacturer,” now, we know that 78% of this group, which is about three quarters, just call it three quarters of this group said, “Hey, we need to change to meet the need of this buyer.” They’ve already identified that. Now, they haven’t done it yet. Now, they have not made that switch. But this group says, “I prefer to buy through the manufacturer.”

James Dorn: And just J, this is in motion, right?

J Schneider: Correct. This is already going.

James Dorn: Yeah.

J Schneider: But the problem is, is that they didn’t say I always want to buy through distribution, that that is the only path I want. Now, the challenge that manufacturers have in this case is, hey, sometimes that buyer says, “I will buy your item directly through you,” that’s the preferred. And in other cases, they may say, “Well, I might want to buy it from a distributor, or I might want to buy another product. But I’d prefer to buy that through distributors.”

J Schneider: So, think of primary products and consumables, primary product and accessories. But sometimes they buy the accessories from your distributor. Sometimes they buy it through you. Sometimes they’ll buy the primary product through a distributor or through the manufacturer. And that is not necessarily easy to always predict during this period that we’re in now.

James Dorn: Correct.

J Schneider: Because the direct buyer has not fully transferred himself over 100%, meaning he hasn’t said, “I’m going to buy only through the manufacturer 100% of the time.” So, this model is still really important. It shouldn’t be given up.

J Schneider: Now, the challenge that we have here is 78 respondents, 70% of respondents are now going to do this next year. They’re going to say, “Hey, in 2022 and 2023, we are moving to support this hybrid model in earnest.” The problem is, is today, these end users are being served by their competitors, this group here, and that’s what this is here.

James Dorn: That’s it.

J Schneider: Yeah. It’s a competitive, shiny, factory, big, big stack there. But the point is, is that these guys are currently servicing this need. Now, they may be serving through distribution as well. But they’re prepared, they have the infrastructure to support that direct customer. And that project sponsor wants a choice. Well, today, for a big part portion of the group, there is no choice, this is your only choice. And so, they look and they move out here. And they’ll say, “Okay, I’ll buy from this guy, what I prefer to buy through the directly from the manufacturer.”

J Schneider: Now, the manufacturer in this case is supporting that brand. They’re supporting that engagement, but they’re also working through distribution as well. So, it’s not to suggest that this direct only model. The idea that you have a winner take all model isn’t really what we would advocate here. What we’re talking about is that using an appropriate model, where you can support your direct, and those prefer to buy direct at that time, as well as your distributor.

J Schneider: Now, you got this other group out here, we’ll just leave them here for a minute, but this is kind of third group of buyers out there that we’d want to talk about. The challenge is it says where does this business come from? So, right now, this competitor is taking a share from this primary group.

James Dorn: Correct.

J Schneider: That’s where he’s getting it.

James Dorn: And it may have nothing to do with product to product comparison.

J Schneider: Correct.

James Dorn: It’s simply just the preference of the segments of users and how they prefer to buy.

J Schneider: Correct, correct. And that’s an important distinction. And they’re able to create this barrier, between this group and themselves by saying, “Hey, we do this now. We have been doing it.” Now, in some cases, they were early adopters. They may have done this a couple years ago. But for the most part, they’re kind of sitting pretty right now going, “Hey, we have an infrastructure. We’ve been practicing this for several years. And we’re pretty good at it.”

James Dorn: Yeah, that’s it.

J Schneider: And that’s a big deal. People don’t realize that you don’t start on day one and become good at it on day two.

James Dorn: No.

J Schneider: So, these guys are out there already. And they’re working in this dynamic. Now, this group says, “Hey, you know what? We see these guys at my door. They keep calling us. We have a customer or client that we spoke to not that long ago, they have literally thousands of calls that come into the factory every year or to the manufacturer. And they can’t service them directly.” Now, where do they go? They might go to a competitor. They might go back to the distributor. We don’t know.

James Dorn: I just want to see if that manufacturing client is in the audience right now.

J Schneider: Probably.

James Dorn: We’ll go unnamed.

J Schneider: Yeah. But so that’s what’s happening. Now, where are they going to grab that market share from? Well, they can grab it from here and compete better and stronger with that existing company that is doing that, or they’re going to go after this 25% guy. So, I’m just going to call him the 25%, I am completely good where I’m at, change is bad, don’t want to do anything. I love my distributor. And I’m just going to completely ignore what’s happening in the marketplace today.

J Schneider: That’s a hard spot to be. Because what will ultimately happen is that group will be the ones who will take the biggest brunt of it for as this group starts transitioning and this group gets better at what they’re already doing. It’ll take share from this group. So, that leaves us to this third end user or third buyer.

J Schneider: This is a buyer that you just don’t know. We’re going to say that you don’t know that. You have no idea who they are. They don’t buy your distributor. They don’t talk to you or buy from you direct. They may buy ultimately from your competitor, but you don’t know that. You have no idea where they are. So, you need access to that. And that’s what’s going to drive your TAM.

J Schneider: And that’s the important point I wanted to stress here is that to grow your total addressable market, your TAM, you need to find new customers. And most of the time, these customers, it might be infinite. We don’t have enough room on our whiteboard to draw, but it goes and goes and goes, and this is a group that you just don’t know today. You probably never knew them, never had access to them, or what have you. How do you reach them?

J Schneider: So, to take that share to reach them, you got to take it from here, you may be taking it from there, or you may have to take it from some other path that they’re going to market. The other point we wanted to stress here is that a 78% of the group is now moving this way. That’s a big piece of these manufacturers that are saying, “Hey, I want to go move.”

James Dorn: Correct.

J Schneider: Now, it’s a question of timing. The timing for the buyer is now. The buyer is basically telling you, “Hey, I want a choice. And I don’t want a choice in 2024. I want a choice in 2021 and 2022.” Manufacturers, who have a variety of issues to deal with this year, because a COVID, and a variety of other problems, are now trying to find a path, how do I service these customers and service them appropriately? And how quickly can I do that? The challenge is, where do I want to be in that time? Do I want to be the last guy to do it?

James Dorn: No.

J Schneider: Or I want to be the first guy to do it? If I’m the last guy to do it, that means 80% of the 70% are already doing this. I’m playing catch up again.

James Dorn: These guys are already winning in a big way.

J Schneider: Correct.

James Dorn: But I think you hit on something really key, which is don’t start here. Which products you manufacture or how you go-to-market? Start up here. Right?

J Schneider: Right.

James Dorn: There is a huge shift going on up here. And these are users that are literally, as I mentioned before, banging on the front door of these factories. I want to buy directly from you. I want your brand. And instead of ignoring it, try and figure out a way to where you can actually still go through distribution and still service the types of users that prefer to buy directly from the brand and the ones you don’t know. I would argue this is probably bigger.

J Schneider: Probably.

James Dorn: A bigger percentage of the market or the TAM, that manufacturers and even distributors just simply don’t know.

J Schneider: And again, to stress, distributors have a huge piece of this. As manufacturers continue to work with distributors, it’s not a winner take all approach where hey, I’m going to go all distribution. I’m going to live and die by that. Distribution is really, really important here, because there’s a big piece of the market that still needs distribution. And there’ll be new entrants, new buyers in the market that will still want distribution.

James Dorn: Correct.

J Schneider: So, some of these customers we don’t know, may go through distribution.

James Dorn: Yeah, agree.

J Schneider: And they may buy direct. What we’re contending here is as this pool grows and continues to expand, are you in a position to be able to serve them and give that user a choice? And that’s the big, big takeaway.

James Dorn: Great question.

J Schneider: So, how do we wrap the session up?

James Dorn: Yeah, so let’s wrap this first topic up and then move into some key takeaways from topic one and then we’ll move into topic two here. So, some key takeaways to consider. Number one, users want to buy directly from manufacturers. And this is obviously accelerated through COVID. But understand that you can no longer afford to just completely ignore these users. You have to respond to it, find some way of working with these users.

James Dorn: What we suggest is moving in a second topic to hear, which is segmentation. Segment your TAM, your market into groups of users, those who prefer to buy directly from distribution, come up with products and services appropriate for that. Those who want to buy directly from manufacturers and come up with a go-to-market that’s specific to those types of users.

James Dorn: The third aspect here that we want to share is just more about market share. So, if you are one of those manufacturers that only has an indirect go-to-market, understand that you are forfeiting market share to your competitors, who either sell direct or have a hybrid go-to-market. So, to your point, J, get on that sooner rather than later.

J Schneider: And I want to be last.

James Dorn: Yeah. Start building out that capability. And finally, is just if you haven’t been considering a hybrid model, consider it. Reset expectations internally and have a conversation grounded on data with your executive leadership team.

J Schneider: No, perfect, perfect. So, let’s move into the second topic. Now, that you want to move into this decision of making a hybrid business model, how to make the right decision for your business and what steps you can take to ensure you have the right strategy and plan to win.

J Schneider: As you begin to expand your direct and user sales or introduce it for the first time, so, if you don’t have it at all, or if you’re going to do that more of what you’re already doing, there’s some factors we want to highlight here, which we found to be most useful.

J Schneider: Now, the number one challenge we hear, James, is it’s going to wreck my business or this is going to be detrimental to what we do. And that’s typically fear-based. It’s fear of the unknown. But before we move into that section, can you share some information about how companies are dealing with that risk and what they’re telling us in our survey?

James Dorn: Absolutely, yeah. So, let’s dive into this next one, J. So, what we’re seeing here is really risks. We asked manufacturers in the survey, what do you foresee as the actions that distribution would take if you did decide to start selling direct or open up a direct sales channel? And what we found here is there’s really three big factors that were surfaced. One was some manufacturers felt as if distributors would react accordingly to say, “We’re going to replace your brand with another brand.” So, that’s a common one.

James Dorn: Another common one was threatening to drop your brand just entirely. Now, the category just dropping. And then a third one that came to the top here was distributors just simply wouldn’t take any action.

James Dorn: So, what I find interesting about this data is that when you really look at it, there’s a very low percentage of respondents that actually felt as if any one of these were highly or extremely likely. The majority of people fell in this category of, it’s somewhat likely or even not likely at all. So, that’s where I think looking at this data, manufacturers see some of this as a risk, but it’s not a major risk or an imperative risk. And we’ll get into that.

James Dorn: But nonetheless, what I would say is still identify these risks, and then try and figure out a way to mitigate them, whether they’re large or small, still have a plan in place, which we’ll talk about.

J Schneider: No, it’s great data, because you look at that 25%. If you were to go back even three or four years, that number probably was higher. How many were-

James Dorn: Exactly. Yeah, a lot of this is based on historic relationships that manufacturers have. So, once you start breaking down some of those barriers and seeing that new manufacturers are doing this-

J Schneider: Correct.

James Dorn: … that’s when it becomes a little bit more.

J Schneider: And in most of our cases out in the field, you’re not the first to do this. There’s other companies that have done this. You’re learning from them. You’re talking to your CEO, colleagues. You’re talking to others that are your peers in the industry in the market. And you’re using that experience to determine what and how you could do something similar and kind of learn from their, not the mistakes, but kind of what their best practices were or some of the things that they did.

J Schneider: But I expect over time at 25% to actually go down a little bit more. As more and more companies embrace this model, that number will continue to go down.

James Dorn: Agree.

J Schneider: And it will change the way that companies approach their sales strategy.

James Dorn: Yeah. And one point to that is, even one’s distributors start to realize and learn that it’s not taking business away from them, it’s actually increasing their business because manufacturers are investing more into understanding users’ needs and building that demand to where both the manufacturer and the distributor are going to benefit from this.

J Schneider: Correct, correct. And that’s a part about balance we’re going to talk about here in a minute.

James Dorn: Yeah.

J Schneider: So, we talked about the challenges. And some of the challenges we want to highlight is really kind of around five or six areas. And the first one is, it’s going to wreck my business, it’s going to disrupt my channel, it’s going to cause my distributor to leave. And I think the evidence on the survey suggests otherwise. But some of the other ones, pricing conflicts, capabilities and resources we see a lot of, leadership alignment and can’t go too much into that, unable to reach new buyers. But one of the ones that are most interesting to me is they’re too slow to act.

James Dorn: Yes.

J Schneider: They do nothing. And they just flat out lose opportunity. And that’s a really interest … And these are for companies that are only selling through distribution today. They just are too slow to do anything. Now, you don’t have to go all the way down the field, but you got to get somewhere down the field so you’re not playing catch up.

J Schneider: The second group is for that hybrid customer now. This is the customer or the manufacturer who’s selling direct, but it’s a small portion of the business, maybe not in a big way, maybe just they’re dabbling here with accessories or consumables and things of that sort. But they really haven’t made that leap into a hybrid model. And those concerns and challenges are a little different than the group that doesn’t do it at all. And those challenges are really around, it’s not really growing fast enough. I’ve invested some money, it’s just kind of like, stagnant. What am I going to do there?

James Dorn: We see that a lot.

J Schneider: Yeah. The second part of that is I’ve underinvested. I didn’t give it as much emphasis or resource that it needed, so I’ve underinvested in that, and it’s just not growing. And the third one is I have limited systems and tools and resources, which are really preventing me from scaling. They’re preventing me from going to that next level. I’ve gotten some success, but I really haven’t been able to go from point A to point B because I’ve had challenges with resources. My systems, my technology are not really designed for that. So, I’m kind of stuck. So, we see that a lot here.

J Schneider: But as we think about those challenges, we want to put in a context of a really simple framework, a five by five risk matrix. This is relatively straightforward. On this matrix and the wall, what you’ll see here is simply two accesses consequence and probability. What is the consequence to my business if I do or don’t do something? And what’s the probability or likelihood that it would occur? So, you want to map those out.

J Schneider: And the reason why you want to map those out is really understand where you are and understand what challenge and risk really is important that needs to be addressed and which ones are more superficial or less important to the business? Now, I think it goes without saying, and James, and I could probably talk hours on this one section alone. But it probably goes without saying that you want to avoid things that are really bad consequence and really high probability.

James Dorn: Is that what this box is?

J Schneider: Yeah, it is.

James Dorn: Right.

J Schneider: So, we want to avoid this.

James Dorn: I’m smart, I get it.

J Schneider: Right. Absolutely avoid that section. Now, again, the point here is that with good data and strong analysis, you can determine what would really be here? Now, the data just showed us that most manufacturers do not believe our distributor leaving me falls in this bucket.

James Dorn: Yeah.

J Schneider: Not there.

James Dorn: This is the red zone, right.

J Schneider: Yes.

James Dorn: So, years ago, the ELT would believe that most of the rest would be in this category.

J Schneider: Correct.

James Dorn: But survey data and even just what people are learning over the last couple of years with all of what’s going on in the market, my guess is the majority of risks would be in these areas here to where you can effectively mitigate them, right?

J Schneider: Yes. Now, not all risk is the same. And this is one of those things that’s kind of a fallacy. The risk of distributor leaving me to me not having inventory to not having a system to my national account or my local account, or what have you, it’s all gets equalized within a company. It all becomes a barrier. And that’s one of the challenges that people have.

J Schneider: So, what we do is we map it out and say, “Okay, if my distributors are national accounts, they might leave me.” Well, that’s probably a high consequence. So, the consequence of that might be a little high. But the probability might be really low, based on the data that we saw. So, this risk, and you might say, “Hey, I don’t have the systems today to really process that.” So, the system, the consequence, to take that order, in a hybrid might be here, but the probability is high, because I know I don’t have the systems.

James Dorn: Correct.

J Schneider: I don’t have that infrastructure today. I don’t have someone to answer the call.

James Dorn: Yeah.

J Schneider: Answer the phone.

James Dorn: You’ve got to build a plan to mitigate that.

J Schneider: Now, is this risk the same? It might be similar, but they’re not exactly the same. And the important point here is not whether or not this box is here, or this box is here, and this one’s here. That’s kind of irrelevant. What you’re looking for is the relationship between them and what gap or distance there is.

J Schneider: If you have many of your risk is down here, and then you have a bunch of it up here, that’s a pretty big extreme. That’s probably likely not the case, in all honesty. But what you do need to think about is where are they in relationship to one another.

J Schneider: As a sales individual or a VP of sales says, they’re going to completely wreck the market if we don’t do this. They’re going to see the risk being up here as high. We’ve asked that same question about where the probability of in the likely consequence of your shipping system, they may rank it down here, which is a very big gap. And that’s what you want to try to avoid.

James Dorn: A big value on this, though, J, sorry to interrupt, it is just simply mapping it out.

J Schneider: Yes.

James Dorn: More often than not, what we see is that companies just say, “Hey, there’s too much risk.” This allows you to at least inventory it and assess it and have a conversation around each component.

J Schneider: And mitigate that and say, “Okay, here’s what we’re going to do here. Here’s what we’re going to do here. This is going to require X resource. This will consider Y resource. And if it’s up here, we can have a choice, we can try to move it this way.”

James Dorn: Correct, yup, very important.

J Schneider: Or understand what is the actual impact. Now, there are times we have things up here. It does happen. It’s pretty rare these days. But it does happen. You just want to understand that. But let me dive into this a little bit more. One of the things that companies don’t think about is they think about what’s the negative impact by business if I do this. If I make decision A, what happens to decision B? The question really is what is the negative impact on the consequence if I don’t do anything?

J Schneider: We saw in the last whiteboard that 78% of manufacturers are now doing something. So, the consequence and risk for that 30% off to the side, what happens? What is their consequence of ignoring the market? So, doing nothing is really not an option. If I give you any advice, you don’t listen to anything else here in today’s session, whatever you do, don’t do nothing. Now, you may not be able to get all the way to a hybrid and 2021 and you may not be able to move as fast as your competitors are catch up. But whatever you do, do not do nothing. That is probably not going to be wise for you.

J Schneider: From here, what I wanted to kind of move into James is balance. And I want to talk about balance in as far as the capabilities. Today, most of your resources, if you’re a distributor only focus manufacture, gets applied to your distributors. And we think of this dollar signs of how much resource and money you’re spending here.

J Schneider: And now, you’ve made a decision, I’m going to start selling direct, I’m going to start servicing those end users direct through my channel, whether it’s directly to your website or marketplaces that you’re using to get into the market, other means, your catalogs, your phone system, whatever that case, may be, you’ve decided, “Hey, we’re going to move in that direction.” Now, the challenge is how do I balance that approach? Now, I can take all of this money and move it over here?

James Dorn: No, no, no.

J Schneider: Don’t do that, right.

James Dorn: Yeah.

J Schneider: Or I can just leave some of the money and move most of it over here. Now we see that a lot where manufacturers will say, “Well, that’s the future. I’m just invested in the future. There’s a variety of companies out there that have clearly done this. We know that’s where we’re going.” And that is true in some markets.

J Schneider: But as we work through this transition state or transition phase in the market, where buyers have not consistently been buying one way or the other, meaning the buyer came to you, and they bought this item from you directly, but they didn’t buy the second item from you directly, for whatever reason, your distribution network was pivotal and making sure that that was a sales completed.

James Dorn: Correct.

J Schneider: Over time, one of these may went out, but a balanced approach to a hybrid market is important. On the first survey data we saw, you saw that small little drop, where those selling direct are now saying, “We probably need to add distribution. Because we think we’re underserving part of our market.” It’s not a big part, but they’re starting to add that. We had a client last year that did the same thing. They said, “Hey, this part of our business, brand new, direct only, maybe we want to think about distribution a little bit to fill in the gap where we can’t service them direct.”

James Dorn: Sure, yeah.

J Schneider: So, it’s now winner take all. [crosstalk 00:32:05] Yeah, not a winner take all there. But balance that approach. It’s really, really, really important. But as you look at this risk and you look at how to communicate to your distributor, think about the data first. The data is effectively your tool to minimize or reduce your risk and conflict. And know your data cannot stress that enough.

J Schneider: So, let’s talk about that. So, whether you’re introducing or selling direct for the first time or you’re expanding and you want to avoid channel conflict, so we have to take that as a topic. How to do that? Well, one thing is communicate. Do not hide your strategy from the market. It never works out well.

James Dorn: Be very direct.

J Schneider: It turns out poorly for everyone. If the buyer turns out poorly for you, turns out poorly for your distributor, turns out poorly for the entire ecosystem. It doesn’t help anyway. Customers are confused. Distributors don’t understand. Communicate, communicate, communicate. It’s a partnership. Talk to distributors about the partnership, how you both contribute to the market. Each have a critical role to play, but use them and leverage them to where their skill is. That’s what you want to do.

J Schneider: The second one is level the playing field. We heard this over and over again. If this is your primary issue about channel conflict and disrupting channel, you can’t have a lopsided channel strategy. You can’t have all your resources one or the other. You can do that, but then you’re all in.

James Dorn: You’re forfeiting shares.

J Schneider: Correct. You’re forfeiting share and you’re taking on probably more risk and more this may move up there. But in this transition state in the market, I think it’s important for companies to realize that. Balance is going to go a long way in being able to help you guide from where you are today into a hybrid approach. So, that’s what I would say there.

J Schneider: A couple other things I wanted to point out here, if we start looking at kind of best practices and how data is going to help you, we have a couple things down here. One of them is again, level that playing field, making sure it’s not lopsided.

J Schneider: Segment your customers. And this is really important. Not all customers are the same. We see this a lot where companies will say, “Well, this is my customer.” But there’s a group that by a little different as a group, they have different needs. If you don’t really know how to segment your customer, you don’t really know how to service them, you go through a distributor or directly. You really got a segment them. Know your customer.

James Dorn: And I think that’s a key point, J. This one down here, it ladders up to really the balance here because this balance is really all about creating end user value. So, as we talked before, there’s end user segments that they just prefer different things. Some prefer distribution because they can integrate a larger product assortment and deliver that to their worksite.

James Dorn: Others prefer to just have a large quantity delivered directly to them from the manufacturer. So, I think as you look at segmenting your customers and you look at balancing out this equation, it’s not a matter of taking one from the other. It’s a matter of investing in areas where you’re creating value for that end user.

J Schneider: Yeah. That’s a great point. And the third point I wanted to make on this one is understand how your distribution works. What value does your distributor provide that allows them to win? How does your distributor win is really, really important here.

J Schneider: If you don’t know how your distributor goes to market have an intimate knowledge of their success and what their challenges are, any decisions you make here would probably be shortsighted. So, we would advocate understand their business as well as your own so you don’t create undue conflict. But more importantly, you attract new value, new customers, and it goes back to those ones you don’t know.

James Dorn: Correct.

J Schneider: You don’t want to step on top of each other. That’s really, really important here. Now you and I, again, we can talk hours on this one section alone. But if we were to wrap this up, what are some key takeaways that you’d give the audience here?

James Dorn: That’s great, J. Thanks. So, let’s talk about that before moving to section three here, which is our final section. But key takeaway one for topic two would be manage your risks. We know that there’s going to be risk in trying to make some moves towards a hybrid strategy. Plot those out and be realistic about them, be objective. And then keep in mind, there’s also risks about not doing anything or about underinvested in certain areas. So, map those downside risks as well to where you can actually build an effective plan to overcome them.

James Dorn: The second one is know your data. We talk a lot about data here, because it tends to overcome people’s personal bias or their history, they say career long knowledge of how something operates. Data can actually be very effective in getting your entire team on the same page and moving forward in a common direction. It can also help you really work with your distributors informing them as to what’s going on in the market.

James Dorn: And the final point here is it can’t be said enough here, is work with your distributor partners. Be direct. Tell them, “Here’s what we’re looking to do. Here’s where we’re investing as a firm. Here’s the opportunity we’re going after from a market standpoint. And here’s how you mister distributor are going to fit into that equation.”

J Schneider: Right. Yeah, that’s a big, big piece of it. Just really understanding that. So now, all this is great. So, how do we do this? So, we talked about the market. We talked about how to understand the risks. Where the heck do we go from here, man. It’s like, how do I get to point A to point B. I just want to start selling direct, let’s go.

James Dorn: Not that easy.

J Schneider: Yeah, not that easy. So, now the big question is, what approach do you take to implement this? Expand what you’re doing today or even add this to your portfolio if you don’t do that already? Do you go with all your products, all your brands? Do you crawl? Do your walk? Do you sprint? Is it six months? Two months? Two years? Five years? What is it.

J Schneider: And in a recent survey that we did, we talked about barriers. That was one of the questions that we talked about. And we asked them, what barriers are really, really out there for you to stop you from implementing or challenging implement. So, maybe we could talk about that for a while.

James Dorn: Yeah. And what came up with this question wasn’t a huge surprise to us. But nonetheless, it was still kind of a surprise to see that it was so prevalent across the larger sample that we ran here. And the top two barriers that manufacturers identify were number one, resources. And we’ve talked a lot about this just in today’s session is one of the most common things that we see from manufacturers is they almost just put their toe in the water a little bit, testing this out.

J Schneider: Those twinkle toes.

James Dorn: Yeah, the twinkle toes. It’s like, yeah, get this chicken finger manufacturer who’s just looking to this test, this go-to-market path. So, they’re looking at tested, but the problem is they’re underfunded, they’re underresourced. So, that’s a major factor.

James Dorn: And the other side on resources that was identified here is there’s so much going on from a demand standpoint and from a supply chain standpoint for manufacturers right now, that it’s just so hard to dedicate resources nowadays because resources are so backed up with other issues. And manufacturers are running leaner today than they ever have been. So, resources is going to be a major issue moving forward. Talent recruitment, I’m just getting the right people into the building. That’s also a major, major reason why resources showed up number one here.

James Dorn: The second one that we’ll dive into is probably technology, which everybody-

J Schneider: Even for the tech companies as well.

James Dorn: If I hear digital transformation one more time, I’m going to jump off a building. But technology is it’s a big issue right now of manufacturers investing in how they can automate more things in the factory, how they can automate more processes in the office of just human capital, of getting better, getting more advanced about what they do.

James Dorn: So, technology definitely comes into play here. If you’ve got a modernized ecosystem, adding a direct sales channel is going to be a lot easier for you. If you don’t have a modernized ecosystem and you’re in the midst of that, this is something that can be done outside of that, but it’s best to have a really good infrastructure internally. So, those were the top two that I think were worth mentioning.

J Schneider: Yeah, and I love this data here. Because look at the other ones on there, where you talk about budget, leadership and culture, you can think about how vast they have these respondents are thinking about, what barrier I really have. And I would expect over time, resources and internal capabilities to shift. The technology is going to kind of be up there. As I mentioned, I think technologies is a challenge for tech companies.

James Dorn: It’s always going to be there.

J Schneider: So, if you’re a chicken processing company and it’s going to be a challenge. If you’re high tech companies, probably still a challenge. So, I think we have to acknowledge that technology is going to continue to evolve. But from a resource. And as you build your business, I think that will become easier for companies over time. And so, when we do the survey again, in a few years, I would expect that data to shift a little bit.

James Dorn: Yeah. And the frequencies could have to be more just because things are changing so fast right now. Jus to keep your finger on the pulse, it’s going to require a lot of different touches.

J Schneider: No, it’s great insight, James. So, where do we start? Okay. The interesting thing about this question is that most companies will start with product and they will start with the question of, what do we want to sell direct? What does it we have and what do we want to sell direct? And that’s almost always the wrong place to start. I can almost promise you, it is the wrong place to start. Do I sell this direct? Do I not sell it direct?

J Schneider: The conversation really begins with consensus and data. And that’s before you get to what you want to sell, do you have alignment in the organization? So, what I wanted to talk about is this continuing up here. And we drew it out because my penmanship is too hard to read. But let’s look at this continuum on the board. And as you start to look at this, you should start with data as we talked about earlier.

J Schneider: Now, the data we’re talking about here is the market, how customers prefer to buy, what their preferences are, what do I need, and what do I have to be able to serve as a customer direct or in the manner that they prefer to buy. That’s the data. And I cannot stress that enough. We’ve talked a lot about data today. But it’s really important, start there.

J Schneider: But the next step is not product. The next step is capabilities. What capabilities do I have today? What do I have for my infrastructure? What do I have for my sales, my inside sales, my customer service, my order processing, all of that? What is available to me right now to where I can make the shift.

J Schneider: Now, if I’m a company that already does this, I have some of these capabilities by maybe limiting my investment there. So, I might not have enough capabilities to serve that customer as they want to be.

James Dorn: Right, and you brought up some really critical ones. It’s not about just building the demand. It’s not about a marketing and product team opening up this ecomm store or this marketplace. You have to have the backend systems and the backend capabilities to really forecast that demand and be able to fulfill that demand.

J Schneider: Right, right. From there, we started talking about the leadership team, the executive team, the alignment within the organizations we talked about earlier. It’s critically, critically important. Now, in a lot of cases, we will see the alignment kind of go superficially deep into the organization. The executive team says we want to sell direct, maybe a few VPS, or products or directors, yes. But the rest of organization isn’t necessarily on board. And they don’t necessarily understand.

J Schneider: How often is that we hear from the CEO, “We are going direct.” And then that same afternoon, I talked to the product group, and they’re like, “We are not going direct. This is a terrible mistake.”

James Dorn: Very common.

J Schneider: It’s awful. Do not do this.

James Dorn: And that’s actually where a lot of our work is, is helping leadership teams really put together a process and a plan to actually formalize that.

J Schneider: Right, right. And that’s really important. The next step from there is making it a priority. And that’s another important one that we wanted to highlight that if you give it half the energy and you say you give us some lip service, it’s not going to go anywhere. It’s got to be a priority throughout the entire organization. Your product group, your finance group, your operations team, your sales, your customer service, all of it has to be a priority. It may not be the same priority as other parts of your business. It may be higher in some cases, maybe lower, but you have to set a priority at the track and you have to manage it.

J Schneider: And then you assemble a team. And now, this is really a cross functional team. And I wanted to highlight that because we go into a lot of discussions where yes, we have a team, and it’s a product guy, and it’s a sales guy, and another product guy and another sales guy, and that’s your team. It’s four people who say, “Hey, this is what we have.”

J Schneider: And that’s really not the team you want. You really want a cross functional team that represents your operations, represents your sales team, your finance, customer service, inbound, outbound shipping, repair, whatever it may be, really, all the parts of your business that would be impacted or that would be required to bring us to life, that’s the team that you want.

J Schneider: Now, it’s got to be an appropriate team. Now, we talk about this a lot with a lot of clients as well. They’ll assemble a team and it will just tax the whole organization. If you’re a Fortune 100 company listening to our webcast today, your team’s going to look a lot different than a $20 million company with 50 people.

James Dorn: Very, very different.

J Schneider: Very different kind of structure here. Assemble an appropriate team that can make decisions, get things done, and it can represent all the functional areas that you need within this model. The second to last one here is the evolution. How are we going to plan evolutionary growth here? Is it a crawl, walk, run? Is it a dive in headfirst? Is it all in, winner take all approach.

J Schneider: There isn’t really a right or wrong way. The more complex your business is, most likely you’ll have to crawl, walk, run it. You’ve got a simple, straightforward business, limited product set, that can be very different for you. And so, this evolutionary plan and the keyword there, “evolutionary” is really, really important. You have to evolve it. It’s going to grow over time. What you start out with in this hybrid approach will look different in two years from now. It’s not a winner take all at this point.

James Dorn: No, great point, J. I want to add to this one here. Because there could even be a situation to where a manufacturer recognizes that there’s just a segment of users out there that are not pursued by distribution. So, even looking at it from a user segment standpoint and building a direct sales channels to go after specific users, whether that’s enterprise, SMB, whatever it may be, this could help really narrow that down into a smaller plan, to where it’s not selling the whole world on day one.

J Schneider: Right. The last one here is a cross functional operational plan, really look at it cross functionally, put it on paper and get serious about it. I cannot stress that enough. That’s going to go a long way in making sure that you don’t miss its segment, that your customer base sees the value in that and you’re not wasting your investment or underutilize any investment that you make here.

James Dorn: Yeah.

J Schneider: But James, you’re a data guy. Okay.

James Dorn: Yeah.

J Schneider: What am I missing is continuing? If you were to look at this and say, “Okay, what steps should I really look at here and what am I missing?”

James Dorn: No, I think you’ve covered a lot here, J. I mean, it’s pretty encompassing. But what I would say is just based on learnings of helping clients through this and seeing what works and what doesn’t work. What I would say is you’ve got to ground everything on a really strong process. Map out that process, make it formal to where everybody understands how all of this is going to start and progress.

James Dorn: From there, I think you’ve got it in here, really have a strong plan, and making sure that plan is representative of your entire organization, the teams that are necessary. The last thing I would say to this, and maybe it’s in here, maybe it’s not, you have to make this plan agile. There’s so much that’s changing outside. And all of this in most part is probably going to be either new capability that a manufacturer is adding, or they’re going to be advancing capability.

James Dorn: Regardless, they’re going through that step change of getting better and better what they do every day. So, you have to make this agile and make it to where it’s not a three-year plan and you’re sprinting for the full three years and never looking back. You have to be able to stop, evaluate and optimize your performance to where you’re getting better and better. And you’re also learning more and more.

J Schneider: Yeah, great point. So, I want to move into best practices. And this is one area want to spend a few minutes as we wrap up today’s session about what do we find as the best practices all the way from generating demand through the systems and logistics and things of that sort. So, I’ve got these little handy dandy green cards here which helps. Yeah.

J Schneider: So, the first one is demand and how to generate demand, how to in a direct bottle begin generating demand. And that’s one of the best practices that we want to talk about. Generating demand through distribution is very different than generating demand on your own. You’ve got to do all the heavy lifting yourself. You don’t necessarily have that partner to help you. They’re out in the marketplace. But you’ve got to do that yourself. Maybe give me an idea of what generate demand looks like to you, James.

James Dorn: Yeah. I mean, this is probably why most manufacturers start their direct selling path by using marketplaces, because there’s inherent demand in some of these marketplaces to where you can start to focus more on the operational side of fulfilling that demand. So, that’s another really popular use case for marketplaces.

James Dorn: But if you’re going to go and create demand on your own, whether that’s through inside sales through an eCommerce website or through a combination of these two, that’s a heavier lift. It’s a heavier investment. And it’s probably new capabilities to the organization. So, you just want to be very strategic about funding that the right way and building out the right capabilities for you.

J Schneider: Very important. The next one is resources. Resources are really important. So, if you’re selling in a distributor only model today, the resources you have are going to look very different than selling direct. It’s not as simple as I just throw stuff up on my website and I just start taking orders, whether it’s inside sales, technical service support, customers may not be able to see the product life. You’re going to have to do it all online. They’re going to have to listen to you on the phone and explain what’s the best option for them.

J Schneider: Resources are really important as far as how you align those new resources to the new buyer need. And it’s a different way of selling. It’s a different way of servicing them. So, those resources would need to be in place.

James Dorn: It’s important.

J Schneider: The other one I wanted to highlight here is systems. Now, systems is a very generic term. And you can talk about in the context of your ERP system, your order management system, your shipping system. It’s very broad. But do you have the tools to operate your systems in that capacity? For example, taking the order, processing the order, showing shipping status, talk about returns, product tracking, as an example. Customer calls up two years later and says, “I have a problem with whatever I bought.” Does your system allow you to track that?

J Schneider: So, those systems are really, really important for you to make sure that the order management, product selection status, whether it’s the product information management system that you’re using, whatever that is, is all designed to continue to support your distributor, but also support and take orders and be able to engage with those new end users that want to buy directly from you. And that’s really, really a big deal.

J Schneider: A couple of other ones is logistics. Logistics. So, Logistics is interesting, because this one here has gotten a lot of attention lately. And with logistics, it’s how do I get the product from point A to point B? It’s shipping times. It’s packaging.

James Dorn: A few headaches nowadays.

J Schneider: It’s inventory, options. The logistics around this has really been a challenge for a lot of companies. And so, I would stress that the best practices are to think about your business in two forms today, as I got my dealer business, my distribution business, but I also have a direct business, which we require different logistics. It might be separate inventory, might be the same inventory. You might have to segment your customers by A, B and C. You might do a first come first serve If your business isn’t complex.

James Dorn: Very important.

J Schneider: You have a lot of options there and the logistics on how you manage that will allow your brand and your company to thrive in that market. If you don’t have that kind of established, you can have a negative effect with that. Customers call up your premium brand. They’re looking for the product, but to get a bad experience.

James Dorn: Correct. You don’t want that.

J Schneider: You don’t want that.

James Dorn: Yeah. Because they’re never going to come back to you as a customer.

J Schneider: Correct, correct. And that’s important for companies to understand is, hey, do I have the resources? Do I have this in place to give that best experience possible? Because what a buyer is expecting? They’re expecting a choice, but they’re expecting a world class experience with your company as well.

J Schneider: And the last one as far as best practices is change management. As we talked about earlier, is your company in a position to be able to embrace this change? And is everyone in the company aligned with that? If you don’t have a change management plan, think about how you would implement a change management structure where the entire organization can understand the value of this and understand why it’s important for the organization to do it, and what tools and how each individual contribute to the benefit of the organization.

J Schneider: It’s not just the benefit of the company, but the benefit of the end user to customers and also the benefit you’re providing to your distributor.

J Schneider: So, the change management is typically an issue of, we’re going to start selling directly to do that. I’m going to take something from my distributor. And so, that’s like, “Well, we don’t want to do that.” The change can also encompass the idea of, I’m going to sell direct to these end users, but I’m going to provide some new value to my distributors as well, what we talked about earlier. That’s all part of this change management discussion.

J Schneider: So, what do we have? Demand, making sure you can generate demand. You got the right resources, the systems and tools in place. You have the logistics to support that. And you can actually take orders and process them and not ruin the experience and that you’ve got a strong change management process in place to be able to do that.

James Dorn: Yeah.

J Schneider: So, how do we summarize this whole section here in the last few minutes?

James Dorn: A lot of great stuff here, J. So, yeah, let’s summarize topic three. And then let’s move into Q&A. Yeah. So, topic one here, the key takeaway, develop your unique approach. And it can’t be said enough. You have to figure out what works well for your business. Understanding how you’re going to market, the products you serve and end users you serve. You’re going to have to make sure that all this works well for your business.

James Dorn: The second part of it is keep it simple. Start small and expand from there. Now, you could look at this from an end market standpoint or at a user segment standpoint, but figure out where your largest opportunities exist, and then work backwards from there to really map out all of what we’ve kind of mapped out here from a process standpoint.

James Dorn: The third one is really the data. That’s the basis for all this. And trying to get more fact based in all of what you do, especially when you’re working with topics like this to where there is some sensitivity from people who have built relationships with distribution, you just simply want to be able to be direct and use the data to say, “Here’s what we’re trying to do. Here’s our vision, please work with us, because it will be an experience that everyone will benefit from.”

James Dorn: And the last part here is alignment, can’t be said enough either. It’s you have to be aligned internally and then you have to use that alignment to actually get everybody else on board externally, including your distributors. So, that I think is a good summary of topic three, J.

J Schneider: Yeah.

James Dorn: Let’s move into Q&A from here.

J Schneider: Yes, segue into some questions. We got some questions that came in during the session. So, I thank everybody for submitting those.

James Dorn: Yeah.

J Schneider: Let’s look at the first one here. How do we tell distributors we are selling direct? And what’s the best approach to tell them? Ooh, that’s a good one.

James Dorn: I think text message will give you a-

J Schneider: Yes, yes. Text them and run. That always works well. We talked about communication here, guys. And really what that boils down to is, you got to be open it on upfront with them. You’re not going to be the first company to have this discussion with them. If you sell gloves to if your distribution, I can promise you, the guys that sell hammers, the guys that sell other products, that same distributor, have already had these conversations. You’re not going to be the first one. But be open, be upfront, be honest, and just talk about your plan, but also talk about what changes you’re going to make to help their business as well.

J Schneider: Now, you may decide, at some point, I want to be a direct only company. That’s okay. But in the meantime, you do have this distributor partner that you want to work with. If you don’t want to work with them, then get rid of them. But if you’re not willing to do that, show what value you’re going to provide. Just talk about what that’s going to look like. Anything you want to add on that one?

James Dorn: No, I think you hit on it. The other thing I’m seeing here is timing, J. Like how long does something like this kind of span. And I know there’s a lot of different size companies that we work with, but just generally from a timing standpoint.

J Schneider: It’s a great question. “How long is this going to take me? I’m a CEO. I don’t have time for this. Let’s go. I have margin to gain. I have profit to gain. Where can I get this done?” Typically, what we see in most companies, you’re looking at probably four to six months, on average.

James Dorn: To be in market.

J Schneider: To be in market. Now, you can do that faster in some cases if your business has less complexity. That can be a little longer if you have higher complexity, if you’re going to crawl a little longer if this is very, very new to you and you don’t have any systems in there. But typically, four to six months to be in market is usually an appropriate gauge.

J Schneider: If you’re going to be significantly longer than that, start asking some tough questions about why. If someone says it could be a week, probably call BS on that and think about, hey. But I think it’s going to be longer than a week. It’s probably a little bit more than that.

James Dorn: That’s a great point. And some of the things that we’ve seen are people trying to overengineer. Now, treat it to where you’re not building infrastructure that’s three years out, in some cases, with especially technology. Have a vision on where you’re going, but build that technology to suit your current demand and forecasted demand. And then add to that technology over time. Don’t get carried away with overengineering everything right up front.

J Schneider: A couple last questions came in. We’ve got about a minute or so left, James. How do we get a copy of the results? Those will be posted to all the registrants for this webinar. So, we thank you for attending.

James Dorn: Yup.

J Schneider: The other one that came in and we thought was good is how do I compete against Amazon? And what can I do to leverage their marketplace instead? We get that question a lot, right?

James Dorn: Yeah, yeah. And let me just read this one. So, how do we … Yeah … Against Amazon. And Amazon is, how do you see it? Is it a competitor or is it a distributor? Or is it a marketplace? So, I think looking at Amazon and trying to figure out how it can fit into your business is I think the question and the answer there. Don’t see it as an enemy. Don’t see it as a foe. See it as what can Amazon do for your business and how do you structure that into there?

James Dorn: For some clients, they’re seeing it as a distributor, as part of their internet sales channel. For other clients, it’s a direct sales channel to where they have a store on the marketplace. In either situation, very effective. Because Amazon has such an inherent demand. And these users that are on Amazon, they’re probably new to you and they’re probably new to your overall distribution as well, because they’re attracting a certain user that prefers that experience. And it goes without saying, so, if you have Amazon as one provider and you have all the other channels kind of mapped out.

J Schneider: And your sales team will evolve through that transition as well.

James Dorn: Yeah.

J Schneider: So, I apologize. We were able to get to all the questions. We’ll answer those questions, submit them to you guys as they come in and so you’ll be able to see the questions and the answers as well. But on behalf of James, myself, the entire Dorn team, thank you for joining us today. And we appreciate your time and insightful questions.

J Schneider: Shortly after session, we’ll make this webinar available to the attendees so look for that soon. If you want to learn more or get more information about this topic, as well as how Dorn Group could help you modernize your strategy, please visit us at www.dorngroup.com. Thanks for attending and have a great rest of your day.

James Dorn: Thank you.