Direct distribution disruption: challenges and solutions for the building materials industry

Building material manufacturers are shifting from traditional third-party distributors to direct end users, disrupting the established model. According to the Boston Consulting Group, direct distribution will reshape the industry by 2030. 

This shift has left resellers and distributors in the construction industry facing new challenges but also new opportunities. To stay competitive in this changing landscape, the industry needs to adapt and embrace the possibilities, partly because of the latest technologies on the market.

The challenges faced by distributors and resellers in direct distribution

As resellers and distributors navigate this new era of direct distribution, several challenges have emerged:

Inventory visibility and optimization

Providing real-time visibility into inventory availability comes with several challenges that resellers and distributors in construction need to address. These challenges include ensuring data accuracy, complex system integration, handling large data volumes, coordinating with supply chain partners, investing in infrastructure and technology, optimizing processes, and maintaining data security.

Legacy systems: synchronization challenges

Existing legacy systems often operate in silos, and while this model works for certain industries, for others, this limitation makes it difficult to synchronize data in real time across multiple channels and locations. As a result, businesses regularly need to enter and synchronize data manually, leading to delays and errors and hindering the ability to provide up-to-date inventory information promptly.

Onboarding partners and suppliers

Managing a diverse network of suppliers and vendors that use varying data formats, integration capabilities, and business practices is highly complex. Streamlining the onboarding process requires a centralized platform that enables efficient management and organization of product-related data provided by suppliers.

Fulfillment complexity in direct distribution

Fulfilling orders for building supply materials poses several complexities. Orders may need to be delivered directly to job sites or multiple locations, and ensuring timely delivery is essential, as delivery delays can lead to project delays and loss of revenue. Managing the various delivery options and minimizing fulfillment delays is vital to maintaining customer satisfaction.

Relying on B2B commerce platform with ERP integration

So, how can resellers and distributors in construction tackle these challenges head-on and ensure they remain competitive in the era of direct distribution? We believe that the answer lies in embracing the right technology solutions.

B2B commerce platform integration: inventory visibility and optimization

A B2B commerce platform integrated with ERP systems provides real-time inventory insights. This integration not only addresses issues related to data accuracy but also fosters improved coordination with supply chain partners. As a result, accurate and up-to-date inventory information becomes readily accessible to all stakeholders, enhancing efficiency and decision-making.

Legacy systems: integration with modern B2B platforms

Integrating a legacy system with a modern B2B platform eliminates data silos, facilitates seamless data synchronization, and reduces the need for manual data entry, leading to the prompt availability of precise inventory information. This means you caninstantaneously receive accurate supply information, streamline your operations, and stay competitive.

Fulfillment complexity: streamlined order processing

When it comes to fulfillment, an integrated platform can simplify order processing and logistics management, ensuring that every step is executed with precision. Moreover, it’s flexible enough to cater to diverse delivery preferences, enhancing overall fulfillment efficiency while minimizing delays and bolstering customer satisfaction.

PIM integration for a seamless onboarding of partners and suppliers

We’re big proponents when it comes to investing in a Product Information Management (PIM) system. PIM integration is key to simplifying the onboarding process for your partners, and it helps streamline the onboarding experience by centralizing product data, making it smoother and more efficient, ensuring product information remains consistent, accurate, and up-to-date.

To learn more about PIM and its implementation process, check out our eBook PIM: Your catalog drives the show. In it, you’ll find a detailed look at what PIM is and four reasons why you should integrate a PIM system into your stack. You can also consult our case studies around PIM integration.

O2 Web’s quick tips: strategies for success

To thrive in the era of direct distribution, resellers and distributors in the construction industry need to find new ways to add value for their end customers. Here are some strategies for you to consider:

• Marketplaces: Explore opportunities to expand your presence on online marketplaces to reach a wider audience and diversify your customer base.
• BIM (Building information modeling): With BIM technology, you can optimize project planning and reduce errors, provide comprehensive project data, streamline collaboration, and offer value-added services to your customers.
• Omnichannel experience: Create a seamless omnichannel experience for your customers, allowing them to interact with your business through various channels, whether online, in-store, or in-person.

Want to know all the opportunities and strategies in this booming industry? You can download our free guide “Ecommerce foundations: winning strategies for the building materials industry”.