19 June 2013 15:35 [Source: ICIS news]
By Matt Tudball
HAMBURG, Germany (ICIS)--Distributors on the sidelines of the European Association of Chemical Distributors (Fecc), which took place in Hamburg from 17-19 June, said relationship management could be the key aspect that stops customers from choosing to be supplied direct by producers.
Attendees at the conference were largely in agreement that the distribution market in Europe is turning towards speciality grades and away from more widely-produced commodity grade distribution.
If customers want easily sourceable commodity grades in markets that are over-supplied, such as in some solvent markets like methyl ethyl ketone (MEK) or methyl isobutyl ketone (MIBK), they may be able to save money by purchasing direct from the producer, cutting out the distribution middle-man.
The MEK market stands as an example where distributors say they are losing volumes to producers, causing distributor prices to drop to almost cost level in order to attract business.
Customer loyalty is also tested when markets are long and demand is poor. MEK consumers often shop around for the best available price, and will switch between suppliers for only a few euros’ difference.
However, one element of business that distributors can offer to buyers is the ‘personal touch’ of customer relations, which can sometimes be lost when dealing with larger suppliers, sources at the conference said.
If a buyer has a problem with an order, or requires technical assistance once the material has been received, distributors, a lot of which are small to medium-sized enterprises (SME), could be better placed to offer assistance than producers.
Distributors also possess knowledge of the local area and environment, which producers may not possess, and can get to know local buyers on a more personal level.
Brining relationship management to the forefront of their business could allow European distributors to win a competitive edge over their larger producer competitors.
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