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The Lost Sheep of American Manufacturers


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Some US manufacturers have lost their way by ignoring the buying experiences customers are demanding.

Too many of today’s US manufacturers just don’t get it. Their customers and buyers want to source, vet, and buy products online. This is a rising tide of new buying expectations. This tide has left retailers and distributors who did not adapt struggling to survive, and I see this tide rolling up on manufacturing. Unfortunately, COVID-19 only amplified the consumer digital adoption process from what was expected to take 5 years, to just 8 weeks (McKinsey). Yet, according to an Industry Week survey, less than 1 in 5 manufacturers believe they are building effective digital sales channels.

So where does this disconnect come from? Why are manufacturers failing to innovate on the customer buying journey?

The most common reasons I hear from manufacturers are:

  • My products are too complex to sell online
  • My customers want to speak with a salesperson
  • My dealers and distributors like my current sales process
  • I have long established relationships with my customers and don’t need to change

Despite these excuses, they are ignoring the red flags:

  • There are online solutions that exist even for the most complex products – Did you know Boeing sells airplane parts online?
  • The demographics are changing. Buying positions in companies are being filled by younger people who want to purchase online.
  • Dealers and distributors are creating their own online sales and digital internal processes.
  • Younger buyers have less brand allegiance than buyers of older generations.

This complacency is great for the competition and dealers who already recognized the need for a digital presence. Competitors, especially those overseas, have been quick to fill the needs of these buyers. Platforms like Amazon (especially their business side) are laser focused on making the buying process simpler. They recognize the way buyers want to transact and are pulling sales away from US manufacturers.

At the same time, this is great for investment buyers. Many of these manufacturers have great margins and consistent revenue streams, yet with limited buyers they have low business valuations. Savvy investors can buy these manufacturers at low prices, invest in their sales processes, and improve their own revenue streams.

Manufacturers have left the door open to smart arbitrage schemes and they face a choice – start meeting your customer’s buying expectations or sacrifice any long term expectations for growth.

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