At the end of this SlideShare you will be able to have an honest conversation regarding your company’s innovation strategy and how it will impact the entire operation. The Industrial Distribution landscape is changing quickly. It time to adapt or die.

1. The Modern
Distributor, 2020
and Beyond
ShelfAware WEBINAR SERIES
December 13, 2019

2. ABOUT OUR
PRESENTER
Andrew Johnson, CEO, ShelfAware®
Andrew Johnson is an entrepreneur,
inventor, and business owner. Formerly
the sales manager at the family
distribution company, O-ring Sales &
Service, he is now pursuing a new
endeavor, a tech startup called
ShelfAware®, which is attempting to
redefine Supply Chain management by
leveraging RFID technology, the internet,
and the power of data. He is also lucky
to work with his three equally talented
and passionate brothers.

3. ABOUT OUR
PRESENTER • I am an entrepreneur & inventor
• Bachelors in Accounting – then O-ring Sales &
Service, Inc. 1995-2015
• Launching ShelfAware an IoT supply chain
SaaS in 2015, www.ShelfAwareVMI.com

4. LEARNING
OBJECTIVES
At the end of this webinar you will
be able to have an honest
conversation regarding your
company’s innovation strategy and
how it will impact the entire
operation.

5. The Modern Distributor
“Industrial companies are in the information business whether they want to
be or not.” – Jeff Immelt (former GE CEO)
“We are selling service first, then the parts sell themselves.” – Gary Zatkoff
This shift in business from selling parts to selling service has been happening
for years. If you’re still just selling parts, you are bit behind the eight ball, but
it is not too late.
• New services models introducing new revenue streams and closer ties with customers
• Shift from CapEx to OpEx spend
• Challenges on revenue sharing across a partner ecosystem

6. A Changing Landscape
High M&A activity in our mature marketplace has moved the cheese, changes
the rules of engagement for key accounts
Changing Demographics, 10,000 Boomers are retiring each DAY
Customer Expectations are evolving thanks to Amazon… Consumerism has
started to bleed into our Industrial Marketplace. Thanks Internet!!!

7. Common Targets
• 3,000+ Locations
• 1,000th “Onsite” location
• 100,000 Vending device
Fastenal has the market cornered on a Service first attitude
combined with the old-school approach to distribution… so you
have to differentiate and attack them where they are weakest. Take
a digital approach to carve out your market share… seals. If you
customers see your spend as “Commodity” your days are
numbered.

8. Common Targets
• Launched in 2015
• Will reach $52 billion in sales by 2023
• Amazon Business is growing at a rate of 115% much faster than even
its Retail (28%)
“…Growing faster than Amazon’s Retail and AWS segments, it continues to
gain market share while also triggering seismic changes to e-commerce
business models across the industrial distributor landscape, with
Underperform-rated Grainger still in the cross hairs.”
Source: Mark Mahaney, RBC Capital Markets

9. Attributes of a Modern Distributor
Digital Face
Sales Force
E-Commerce
Yes or No
Somewhere in-between?
Service First

10. Your Digital Face
• An online presence is a must
• I believe a good combo, say LinkedIn/YouTube can in large part replace a website or at
a minimum supplement a website so you don’t need an expensive website rebuild.
Leverage these third party content hosts to supplement your website.
• Face your fears. If you join LinkedIn you will not lose all of your business to your
competitor. It’s just the opposite. You will get new opportunities through LinkedIn’s
network.
• If you have a compelling story tell it with video content, short and sweet
• Try LinkedIn Ads

11. A Bevy of Services
Triple-Down on your Service Differentiators
These will set you apart from Fastenal, Wurth, Trelleborg, etc…
• Engineering, Testing, Prototyping
• Supply Chain Management aka VMI Solutions
• Assembly & Repair bordering on light manufacturing
Pick 2 or license a 3rd party solution to round out all 3

12. Unique E-Commerce
• What a cluttered space now…. If you didn’t start a decade ago don’t start
now.
• If you don’t have an e-commerce offering now don’t bother instead
considering using a third party like eBay or Amazon so you don’t have list
your whole product range and can avoid the HUGE investment and On-Going
maintenance expense

13. A Salesforce of the Future
• The Machine by Justin Roff-Marsh
- Reshapes the sales structure to accommodate the changing
landscape
- Thanks to the Internet and heavy M&A - No more sales
geographies
- If you successfully deploy services the sales cycle will
naturally become a more internal sales, team driven activity.
Think project managers… not used car sales
- Again, thanks to the Internet you don’t need sales guys to
distribute product literature… buyers are better informed
than ever before

14. Where to Start?
Be Self-Aware and Establish Your Finish Line
Self-Aware and assess your particular company’s readiness to deploy and take advantage of innovation
After a Self-Assessment dig in!
• The natural starting place would be your Digital Face
• Decide how to continue or even if to continue your E-
Commerce route
• Do you have enough services? Consider adding Go-To
Services such as a VMI
• Sales force realignment is never easy, take it slow to avoid
disruption. Making progress on the above will help with
the realignment.

15. Innovatingthe
IndustrialLandscape
A new way to manage your
customer’s from across the
globe.

16. Collaboratively manage
digital supply chains
• ShelfAware LLC is a Supply
Chain Automation platform
that equips B2B Suppliers
to offer a next generation
VMI (Vendor Managed
Inventory) to customers
across the globe.
About Us
ShelfAware® approaches the market with
practical solutions drawing on its founders
operation experience inside the industrial
marketplace 16

17. TheProblem
TheSolution
TheProduct
ShelfAware offers Suppliers the total solution
starting with a the best VMI solution and laying a
foundation for supply chain innovation
17

18. The Problem
Inefficient VMI’s
Many suppliers have
inefficient Vendor
Managed Inventory
systems that are time
and resource intensive,
expensive to scale, and
hard to manage
Consumer Frustration
Consumer’s supply chains are
growing more complex and
difficult to manage while their
expectations are becoming higher
with a consumer mentality
Manual Data-Capture
Barcodes, barcode
scanners, paper & clip-
boards are ineffective,
cumbersome and hated
Purchasing
Traditional purchasing
methods that utilize blanket
PO’s and forecasting are
rarely accurate
Scarce Analytics
Analytics are only as good as the data
they are built around. Current supply
chains generate very little usable data
for meaningful analytics, let alone
automation
18

19. The Solution
The ShelfAware® system combines proprietary RFID hardware
& software to bring an IoT inventory solution to the masses
through a collaborative platform
Hardware
RFID printers, fixed
scanners, and handhelds
are combined to track
inventory consumption
Software
Cloud based software
automates Purchase
Orders and Receipts and
provides transparency
Collaboration
Our Platform allows
multiple Suppliers to
collaborate to satisfy the
needs of the largest
Consumers
19

20. The Product
ShelfAware® combines proven hardware with custom
software to create an inexpensive and easy to deploy
Automated Supply Chain system
RFID Printer
Print and encode tags
at the point of
shipping
Mobile Scanner & App
Perform on hand
inventory audits in
minutes
Smart Labels
Unique RFID tags
encoded with product
information
Scanning Station
Patented scanning
stations monitor onsite
inventory consumption
20

21. The ShelfAware
Platform at a Glance
Web-Based App
• Built on the Google Cloud environment providing
for large scalability
• Integrated with a robust Transportation
Management System allows for ready made
logistic feature development
• 60 second disaster recovery time with real time
data replication across multiple data centers
21

22. TheBusinessCase
The ShelfAware Platform equips independent Suppliers with a
modern VMI and allows for collaboration with complimentary
product Suppliers to service a single Consumer
22

23. Market Opportunity – Flux and Fragmentation
$75B
Industrial Supply Market
The Industrial Supply
Industry is a $75 Billion
per year industry
50%
Market Flux
The 50 Largest companies
generate only 50% of
annual industrial revenue
1600
Fragmentation
There are approx. 1,600
companies that are
earning less than $10M
23
The scale and fragmentation of the industrial supply market makes it an excellent target for a platform business.
The concentration of small suppliers gives ShelfAware an easy route to building a modern monopoly.

24. Business Model – CloudSourcing™
ShelfAware’s Software as a Service (SaaS) for Independent Specialized Suppliers
24

25. Disrupting the Competition
Small the New Big Business
• ShelfAware’s Platform Play
• Equips specialized independent
suppliers to offer cutting edge Vendor
Managed Inventory services remotely
• Through collaboration with other
platform suppliers ShelfAware allows
Suppliers to stay focused on their
core product offerings.
• ShelfAware’s Supplier collective can
offer the industry’s largest consumers
the breadth of product they need
while providing them the BEST
product engineering support, pricing,
and lead times.
Competitor
• Fastenal a target competitor for
ShelfAware
• 3,000+ Branch Locations
• 1,000th “Onsite” Location
• 100,000 Vending devices deployed
• Market cornered with their service
offerings, but lack product
knowledge, product engineering,
and specialized supply chains to
provide cost competitive supply.
25

26. Team
Andrew
Johnson
Founder & CEO
Andrew dreamed up
ShelfAware
Jonathan
Hansen
CTO
Jonathan has
Jay Barrow
Vice President
Jay brings a strong track
record as an innovator and
plays a supporting role in
ShelfAware’s business
development
26

27. Testimonials
ShelfAware’s system is the most advanced
process for inventory control we have and is
proving to be the most efficient way for us
to accurately keep track and control our
inventory.
“ ”
Alan Circo – GM, Oilgear Mfg.
Now we don’t deal with purchase orders, we don’t
deal with emails, we don’t deal with invoices. All of
those activities have gone by the wayside. Since we
have gone to ShelfAware that pain has gone away.
It’s a seamless transition that has been working for
out plant.
“ ”
Jason Dunbar – Plant Manager, Energy Mfg
What I used to do is spend hours a week if not days a
week ordering o-rings, snap rings, retaining rings, and
seals. Now I spend that time sending out quotes for cost
savings, looking for new vendors, and sending out
quotes for new products, all that you know I just
virtually did not have the time for before ShelfAware.
“ ”
Richard Griffin – Supply Chain, Eskridge Mfg
27

28. ThankYou
Contact Us!
+1 913 270 8400
Contact@ShelfAwareVMI.com
http://www.shelfawarevmi.com