European Distributors Grow with Fee-Based Services

By Megan Headley

Executives of wholesale distributorships outside of North America have found that they are able to charge customers for new services rather than giving away value-added services for free, according to a new report.

Lawson Software in St. Paul, Minn., sponsored the research of the global survey paper Growth Strategies in Wholesale Distribution, by Adam J. Fein, Ph.D., of Pembroke Consulting Inc. The company surveyed wholesale distributors in several industries in North America, Europe, Australia and New Zealand.

"Most notably, more executives in European countries identify fee-based services as an important factor in their revenue growth plans than North American executives," the report says.

However, according to the survey, North American wholesaler distributors have found -less success than their European counterparts when trying to charge for activities that used to be given away for free. Instead, the report found, "North American wholesale distributors have been most successful with services that take on critical tasks in a customer's business."

According to the report, "Growing with fee-based services requires wholesale distributors to develop services that directly improve a customer's operations and provide measurable gains in the customer's business." Success is measured by customer productivity gains, labor-savings, ergonomic improvements or an improved time-to-market.