Discover how sales reps using Generative AI in procurement qualification are accelerating workflows and closing 50% more deals.
Distributors
December 12, 2024
Chemical distributors are important players in today’s chemical manufacturing value chain, serving as key intermediaries between suppliers, principals, and end users. Across chemical sectors, manufacturers often seek to streamline operations and expand their market reach. These manufacturers turn to distributors as experts in logistics, customer relationships, and specialized market expertise to ultimately sell their chemical products and drive growth in new regions or markets.
The growing reliance on chemical product and equipment distributors brings both challenges and opportunities. With so many industry-wide changes, suppliers must continuously adapt to new regulatory or compliance measures, economic volatility, supply chain challenges, and geopolitical stressors.
Let’s look at what chemical distributors can do to stay ahead of the competition and prepare to serve their crucial role in the chemical supply chain.
Distributors are often the first to be impacted by the broader challenges that impact the chemical industry. Supply chain disruptions since the COVID-19 pandemic have driven distributors to reconsider sourcing strategies, adopt digital logistics management systems, and improve inventory practices. Fluctuating raw material and energy costs also require agile pricing and contract negotiations.
Perhaps most important is the shift in global production — particularly in Asia-Pacific. Rapid industrialization is realigning the global chemical landscape, prompting chemical buyers to seek alternative suppliers and chemical manufacturers to find new distribution channels.
Today, 55% of principal chemical manufacturers expect chemical imports from Asia to become increasingly dominant in the Western market. In preperation, the industry has seen an increase in outsourcing to third-party distributors. Companies want to expand their global reach, prioritize internal focus on core accounts, and reduce cost-to-serve.
In this competive landscape, maintaining strong supplier relationships can be challenging for chemical distributors. When distributors lose a principal and add a new one, sales teams must quickly learn an entirely new product portfolio, straining sales representatives and technical experts as they strive to reach revenue targets.
The risk of suppliers switching distributors due to performance dissatisfaction is a constant concern, compounded by competive or regional constraints and the potential loss of product lines. Regional operations can cause distributors to sell competing products from various suppliers. This requires careful management of internal “firewalls” to prevent conflicts of interest and maintain supplier trust.
In short, balancing supplier constraints with customer needs is complex. Distributors must navigate minimum order quantities, lead times, and product specifications while meeting diverse and often urgent account requirements.
Chemical distribution teams often experience high turnover rates that exacerbate a widening knowledge gap. As experienced professionals leave the workforce, companies are left with fewer trained sales reps who may lack in-depth knowledge of the products they sell. This loss brings about noticeable impacts given the technical nature of chemical products and their applications.
For chemical distributors, knowledge gaps are particularly acute as sales reps manage broad portfolios, onboard new customer portfolios, or even sell the same product with multiple uses into unfamiliar verticals.
With an overwhelming amount of products, suppliers, and customers to support, technical experts in distribution departments struggle to support sales teams across multiple product lines and customer inquiries. This can potentially lead to slower response times and missed sales opportunities.
Maintaining traceability and quality control are crucial across the supply chain. As products change hands from manufacturer to supplier to distributor, safety risks increase. This not only applies to compliance risks but also to product safety and integrity. Therefore, total quality assurance requires sophisticated traceability and visibility from material sourcing to final sale.
Additionally, long sales cycles — especially when dealing with new customers or novel products — make distribution more challenging. The many applications of chemical products mean extensive testing and procurement approval processes must be followed, which further extends the time from the initial lead to closing the deal. Distributors need cohesive strategies to navigate these processes efficiently.
At the end of the day, distributors also have to identify the right customers at the right time. They must constantly prospect new business while nurturing existing relationships and remain aware of market trends alongside emerging product applications.
Despite current challenges, the chemical distribution sector is ripe with potential. The increasing reliance on distributors poses opportunities for market expansion.
Innovative chemical distributors are adopting generative AI to gain a competitive edge. Advanced chemical AI platforms like Nesh Sales AI enhance sales performance, streamline operations, and equip distributors to provide superior customer service.
GenAI platforms improve lead generation and prospecting for chemical sales. By analyzing market data and internal portfolio information, GenAI identifies potential customers likely to need specific chemical products. This enables a more targeted approach so distributors can reduce time spent on unqualified leads.
Furthermore, AI-powered tools accelerate sales cycles by providing sales reps with instant access to relevant product information, application data, and customer details. This enables faster, more informed responses to customer inquiries, potentially shortening the time from initial contact to a closed deal.
Generative AI facilitates faster onboarding of new distributor sales representatives, quickly covering important product specifications, applications, and sales strategies. Sales reps can onboard new clients and their product portfolio faster as well.
For chemical equipment distributors, GenAI trains reps on how equipment can be used in different verticals. Platforms like Nesh update and disseminate information about diverse product or equipment portfolios in real-time. That way, distributors have access to relevant information regardless of how frequently product lines change.
AI helps gather insights into cross-vertical applications of chemical products or equipment by analyzing data from various industries, suggesting novel uses for existing products and opening new market opportunities for distributors.
Forward-thinking chemical manufacturing companies are using generative AI to achieve growth and efficiency. One market expansion services provider uses chemical sales AI software for its chemical testing equipment distribution process. Nesh supports distributors and sales teams by delivering precise product knowledge, customer targeting, and more — all using enterprise data and specialized chemical knowledge.
With the many changes and challenges in the chemical industry, distributors who harness innovative Gen AI technologies gain a competitive advantage. The chemical industry has been one of the slowest to integrate the proven capabilities of Gen AI. Chemical distributors that act faster will have a greater advantage over their competitors who wait.
By addressing complex issues regarding sales efficiency, knowledge management, and everyday sales operations, Gen AI systems like Nesh provide a path forward for chemical distributors. Those looking to strengthen their skills and positions should focus on:
As more companies recognize the value of generative AI, we expect transformations in how chemical products are sold, distributed, and supported across global markets. If you’re a chemical product or equipment distributor aiming to stay ahead, explore the Nesh Sales AI platform. Book a demo today to see how Gen AI can support every aspect of distribution and success.
Want to learn more about GenAI use cases for the chemical industry? Check out the fact sheet, The Future of Chemical Sales: 6 GenAI Use Cases.
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