Where Do Distributors Go From Here?

Although it has not been officially announced, in practical terms, the U.S. economy is in a recession. The only question now is how deep this recession will be and how long it will last.

Expectations are that it will be far worse than the 2008 decline. And although things may still turn around fast, the “V” some talked about a while back, with a steep descent followed by a rapid and dramatic uptick, is no longer expected.

For many distributors, this economic environment has created considerable uncertainty about the supply chain in general and their own businesses in particular. This downturn is much more global than the one in 2008, so its impact will likely be felt on many more industries, manufacturers, suppliers, and distributors.

Some distributors may be wondering if they will survive this downturn. Although most will likely pull through, some will, unfortunately, fail. But there is another side of that coin we should not overlook.

Even if some distributors disappear and others just manage through, in every downturn, there are always companies, including distributors that find burgeoning markets and beat the odds. We may not know which markets those are right now, but one thing we can do is look back to 2008 and see which industries did well during that downturn. These same industries, discussed below, may deserve greater scrutiny for those distributors looking for new opportunities today. 

Discount Retailers

In 2008, “dollar” stores did very well. Dollar Tree, Family Dollar, and Dollar General carry very inexpensive commodity-type items. Before the 2008 crash, these stores catered to a select group of consumers. After the crash, that consumer base broadened considerably.

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