Why distributors don’t do eCommerce
eCommerce has a prominent place in the future of business for distributors and manufacturers. But many of them have not pursued it whole-heartedly. There are some common rationales for this shared by distributors and manufacturers, but many of them are based on old and faulty assumptions. If you are among those who are undecided or who have decided against doing eCommerce, take a look at the common objections below.
1. Our field sales reps won’t like it
A common concern among distributors is that field sales reps don’t want an online store doing their job for them. They think it will cut into their commission and compensation. Any good executive would be wary of a practice that harms such an important facet of their business. They worry that they could even lose those reps. This is very easily solved. Field sales reps should be getting compensated when someone buys from one of their accounts. Field sales reps will then see this as a method that increases their own efficiency.
2. We can’t get the product data
With the launch of any online store, it’s important to know that you can accurately provide the necessary data for any potential customer. Without it, the customer will either turn away or they’ll call up your office, and it will be as if there was no online store to begin with. Many distributors worry that finding the data will be impossible, and if it isn’t, very expensive. Finding photos, attributes, training details and safety data is something that cannot be replaced. The acquisition and management of data has become much easier. There are many third-party companies that can be enlisted to find this data, at $1.50 – $2.50 per SKU, this is in the midrange of expense, but data isn’t required for every product. With a little refining and a little work, this data can be readily available. The data can be found via another method. An increasing number of buying groups, co-ops, and industry associations aggregating product data for use by their members in eCommerce. If your company is a member, you can likely acquire the data for 15 to 40 cents per SKU.
3. Our customers don’t want it
Many businesses feel like this isn’t what they are meant to do. That their customers don’t want it, wouldn’t use it and that it would be a waste of time for the world they operate in. We think this bears inspection. The first thing to inspect is what generation you’re asking. For anyone selling to millennials, eCommerce is more than good, it is required. Many millennials say they won’t buy from a business that doesn’t have eCommerce. Any good forward-looking business needs to consider these things. A lot of businesses pride themselves on developing relationships with their customers, being helpful, friendly and knowledgeable as something that their customers can count on. This is an excellent trait, but the nature of relationships is changing.
4. We already have eCommerce
Maybe you have a website that allows customers to view their accounts, or order a product, or see a (custom) catalog. This is what many distributors define as eCommerce, but when one compares this with Amazon or Grainger, it isn’t even in the same ballpark. You need to be able to not only buy, but shop on a good eCommerce platform.
5. It’s too expensive / we can’t afford it
It used to be a million dollars + to get into the eCommerce world, but like most products, eCommerce is becoming commoditized. You can likely find an eCommerce platform for under $20,000 to $150,000. That’s a steal.
6. We don’t have the expertise
Many distributors feel that their company lacks the expertise, or IT staff to run and operate an eCommerce platform. In today’s business world, you don’t need it. Just as third-party companies can gather your data, third-party companies can largely operate your eCommerce platform and perform many aspects of the marketing.
7. We are too busy
Everyone is busy. While your company may have short-term goals that it is focusing on accomplishing, Amazon, and other online sales titans don’t care. The market will evolve and pass you by. While you are ignoring these opportunities in hopes of accomplishing other tasks, you are losing immense profit. We’ve done studies that indicate that if you don’t have good eCommerce, you could be losing 2% to 4% of revenue every year. Don’t look at this from a tactical perspective. This is a strategic objective.
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