A New Player in the Canadian Gray Market
I remember the first time I was confronted with the gray market in Canada. I was in my office and one of my inside sales personnel came in and said that we lost XYZ project in Northern Ontario to a competitor that didn’t even have a sales office in Canada.
Bottom line, the competitor quoted and shipped the entire order from their United States location below our distributors price. This was October 1986 and this was not the last time I became aware of this practice.
The term “gray market” refers to the sale/import of goods by USA distributors, manufacturers and end users into the Canadian market.
Considering my office was located in the heart of the automotive industry in Canada, over the next few years I became accustom to this great market practice. I didn’t like it, but I couldn’t do anything about it.
At the same time, this practice was not just confined to the automotive market segment. I noticed losing orders across Canada in a variety of market segments.
Bottom line, the Gray Market is growing in Canada and the Internet is playing a part in its growth. Another main contributor to this growth is a new player — Amazonsupply.com.
Listed below is their mission statement in just a few other features/benefits found on the webpage.
Amazon Supply — the Store for Business & Industry. We aim to offer Earth’s largest selection of essential products for businesses, labs, workshops and factories.
1. More than 750,000 essential products for business and industry (with more being added every day)
2. A 365-day return policy
3. Every day low prices
4. A dedicated customer service team and technical help at 1-800-220-4242
5. FREE Two-Day Shipping on eligible orders $50 and over
6. Easy payment with an Amazon.com credit line
Owned by Amazon.com, and use the same safe and secure shopping technology pioneered by Amazon.com.
In the last issue of TED magazine, Dirk Van Dongen, the president of the powerful National Association of Wholesaler-Distributors and long-time expert in distribution, says the threat posed by Amazon into the industrial marketplace should not be ignored.
In this exclusive interview with tedmag.com, Van Dongen also stated that distributors need to take Amazon seriously because of the substantial amount of money it has to invest in the sector and its recognized customer service.
I also agree with Mr. Van Dongen’s assessment of Amazon Supply. Amazon.com will continue to fund this new venture into the electrical market segment in North America.
I know most of us are comfortable on how to source products for upcoming projects. However, the new generation managers may consider the Internet and Amazon Supply as an easier solution to source electrical products.
Bottom line, all of us must remember that our business will only be successful if our relationships with our end-users are at the highest service level possible. This is the one element that the Internet and Amazon Supply cannot offer: face-to face conversation with our end-users.
So, be aware of this new competitor but also send a message to your entire sales team that their day-in and day-out conversations with the end-user is the backbone of your company’s continued growth rate.
Read more from Paul Eitmant in CEW:
– The Cost of Bad Leaders
– NAFTA Still a Good Show
– On Being an Effective Coach
– The Biggest Risks to Canada’s Economy In 2015 and Beyond
– Networks and Lighting Standards – Follow Up – One Year later
– How Healthy is Your Business?
– Social Media: Is It the Future for the Electrical Industry?
– Customer Service: A Key to Success
– The Right Price to Get the Order — the Last Look
– The Good Old Boys Club “Changing of the Guard”
– Who’s Next Within North America’s Electrical Distributor Channel?
– Generation Y – Next Generation – Never to old to Learn!
– LEDs: the Fastest Growing Product/Market for 2015
