Back to the Future in 2014: A Former Wholesaler’s Prediction
Are local distribution firms on the horizon?
My first day at work in 2014, I was delighted to get a call from a very dear mentor of mine, a former wholesaler who built his business in the years when there were hundreds of them and closed it when independent wholesalers were losing their place in the changing distribution model.
This wholesaler has a few bookstores left from the old days and keeps his finger on the pulse of magazine distribution through his stores and his friends in the business. He’s always had a remarkable sense of the ebb and flow of business trends and what they indicate, so when I’m lucky enough to hear from him I always listen attentively to what he has to say. Naturally I wanted to know what he thinks about our current magazine landscape.
What he sees is opportunity.
“The business today is just the same as it was when I first got into it,” he said. “Dominated by very large distributors who couldn’t maintain profit by sending product to such far-flung locations. Magazines are disappearing from the shelves because no one could afford to distribute them to the stores. Racks are getting smaller as a result. Handling all those magazines—that’s a lot of work.”
Maybe so, but where, I wondered, was the opportunity? It looks like the opposite, doesn’t it?
Not for a trucker or a shipper or a warehouse, my friend responded. Not for someone starting out and looking for a need to fill. “If I were a young man, I’d do now what I did then,” he said. “I’d start a wholesale agency. I’d pick up local businesses, the stores that can’t make it work getting their shipments from thousands of miles away, and I’d bring them magazines and I’d do it well. We had consolidation, then we had fragmentation, and now we have consolidation again. It’s time for the pendulum to swing back.”
My old friend is quick to acknowledge the differences today—the national chains doing their buying nationally, the loss of the mom and pop businesses that once played such a key role, the growth of digital sales. But problems, in his world, equal opportunities, and a broken model demands fundamental shifts.
“Throughout this country we still have local businesses,” he said. “They’re starting up all the time. Chain stores are closing down here and there and independent retailers are moving into their old space. And some chains want local service for their stores.
“You’ll be seeing changes in the coming years, even just in this year. And one way the changes could go is to have new local agencies pop up, to do the work the big guys can’t.”