Industrial Distributors In A World Dominated By Amazon
Written by Michael Elson, Vice President of Penn Tool Co.
With over 50 years in the industrial distribution business Penn Tool Co., has seen many changes. As a brick and mortar store in Newark NJ back in the 1960’s we did very well simply supplying basic tools to the local manufacturing community that was located in that area at the time. As things changed we saw that you can go national by putting your items into a paper catalog and sending that out to potential customers through the mail. That model would be very successful and last into the late 1990’s. As the internet became more popular it was an easy transition to take that paper catalog and build a website that would also have the same items in it for sale. However although it does not seem that long ago, the internet took time for people to get used to. The catalog business would last many more years and would be used alongside a company website. The two could work hand and hand providing access to tooling to whoever wanted it. Sometime around 2015 we noticed something very concerning. The paper catalog business we were so used to supporting our business model seemed to crawl to a halt. Our website was old and needed a redevelopment. In addition we noticed that Amazon was creeping its way into our industry. No longer was it only for books and home goods. This behemoth was taking business left and right away from Industrial Distributors like Penn Tool Co.
We have been approached numerous times to list our products on Amazons marketplace and have dabbled there with limited success. Our feeling is that the amount of work involved and the fees charged by Amazon it just was not worth it. The only people making money in our opinion off this relationship is Jeff Bezos and Amazon. According to Gary Vanerchuk who is someone I respect very much, Amazon did something very clever when nobody else was really taking the time to do so. They were pumping hundreds of millions of dollars into Google Adwords making sure they were coming up at the top of Google Searches long before anyone was really focusing on that. It worked out very well for them and is a major reason why they are so successful today. Everyone knows the Amazon we all know in 2019 is very different from the Amazon we knew many years ago. We are now living in a World dominated by Amazon. Consumers seem to love Amazon for the convenience and pricing but is there a cost to having one company dominate the internet? We have seen the CEO Jeff Bezos become one of the richest person in the world. We have also seen tens of thousands of small businesses go out of business because of Amazon.
Lately there has even been talk about breaking up Amazon. I am not sure if or when that is going to happen, but I do think it is time for the consumer to take a step back and decide if this method of buying is one they want to participate in and for how much longer? When you see someone like Jeff Bezos acquire such enormous wealth while others seems to be struggling it might be time to just say no and look to other places for goods and services. Everything comes with a price and while you might like some of the features of Amazon it is really is time to evaluate and see what it is really doing to society and to small business across the world. Penn Tool Co., does not feel it is beneficial to partner with Amazon like so many distributors and even manufactures seem to be doing. Sometimes when ordering on Amazon you don’t even know who is fulfilling your order. Customer service is very hard to get in touch with and if there is a problem most people don’t even know who to call. We just think it is at the point where everyone should really look at Amazon and think about the effects of having one place selling everything you need.