Distributors’ top-perceived competitive threat continues to be websites that sell promotional products – and the threat is growing larger for them every year. Last year, 44% of distributors labeled online competition as their biggest concern, up from 35% in 2011.

But if distributors plan to compete with those websites on price, they’re likely to have a very unsuccessful and frustrating experience. “If a small distributor is trying to compete with the online wholesalers, it’s going to be very difficult, because the online wholesalers have a totally different business model,” says promotional business coach Rosalie Marcus. “They’ve got to find a different way to compete and they’ve got to position themselves differently.”

Distributors must let potential customers know that, while they might be more expensive than the online wholesalers, they add a significant amount of value. But how do you let those customers know you exist in the first place?

Marcus suggests specializing in target markets and painting yourself as an expert in those fields, even as you try to break in.

LinkedIn Groups in those target markets offer a natural entry. She also recommends engaging in content marketing, such as writing articles and offering them for free to nonprofit journals within a given industry.

Say, for example, that you’re interested in the health-care market. “There are a lot of journals and magazines for health-care organizations. Offer something like ‘The 10 best ways to promote your business’ as a free article, with your byline underneath it,” Marcus says. “You can do that for any niche market. Content marketing is huge.”

Marcus says becoming an expert in a niche market rather than trying to be all things to all customers is a fantastic way to differentiate yourself from the one-size-fits-all Web companies. “People want to deal with experts,” she says. “If you’re just a general promotional products vendor, it’s going to be very hard to compete, but if you have expertise in a niche market, you’ve got a much better chance of them wanting to speak with you.” Eventually, as you build up your customer base in that market, referrals will pour in because customers will tell others about your specialized knowledge of their industry.

Along with positioning yourself as an expert, Mike Michalowicz, author of Profit First and founder of Profit First Professionals, says another tried-and-true way to compete with the online guys is to make customers aware of your consultative abilities. The best approach is videos. “I suggest making short videos sharing relevant tips,” he says, “and, at the conclusion of each video, explain how you differentiate yourself by consulting.” Videos can be posted on YouTube, Facebook and any number of social media platforms.

The consultations can even be presented as services to weigh the merits of various products and proactively identify which will serve the goals of the customer. “In short, to compete, distributors can and need to get more engaged, more consultative with a client,” Michalowicz says. “I am not suggesting that this service is done for free. On the contrary, you can bill a premium if you design a powerfully effective consultative program. Then, the products are no longer the focus; they are just the means – and by doing this, you negate the competition.”

Marcus agrees that becoming a full-service marketing consultant rather than simply settling for being a by-the-numbers salesperson will help customers forget about those cheaper Web alternatives. “You need to have a thorough understanding of your prospect’s business – who their end-users are, the challenges they have, the objectives for any marketing campaign,” she says.

Adding services by utilizing the help of freelancers can also help to boost your profile and demonstrate your ability to be a one-stop solutions provider.

“For example, a lot of distributors are adding graphic design, meeting planning, trade show help and social media marketing. Put an entire marketing package together for the end-users,” Marcus says. “Always be the added value – an extension of the prospect’s marketing department. That’s how you really compete with them, because if you’re trying to compete on price, it’s going to be impossible.”