Joining the ten percenters

27 February 2003

Distribution and routes to market is a key issue for the lifting equipment industry. In most cases (though not all) there is a low degree of product differentiation and so success depends on making product readily available, in the right place, at the right time, for the right price, with the right back up service. Often this depends on a species that is sometimes described rather disparagingly, but not entirely inaccurately, as 'ten percenters'. They don't make anything, they just buy stuff and sell it on again for an extra 10%. The importance of their role should not be underestimated, however.

Morris Material Handling Ltd of the UK has long been doing a perfectly reasonable job of making hoists and getting them to end users, either via its own distributors, or through badging agreements with other manufacturers. Now Morris has decided to join the ranks of the ten percenters. Contrary to the growing trend towards elimiating links in the supply chain, Morris is inserting an extra one - itself. It is looking for other manufacturers' products, such as pallet trucks and maybe slings and shackles, on which it can put its name and supply to its distributors. Success of this initiative depends on Morris being able either to add value or, by using its purchasing power, to reduce prices. Is this a revolution in the making, or should Morris stick to what it knows best? We welcome your views.