Online partners
Distributors must be ready when manufacturers come calling for e-commerce
By Sara Procknow -- Industrial Distribution, 6/1/1999
WHEN THE FOLKS FROM NATIONAL SEMICONDUCTOR stopped by to talk about their Web site and e-commerce, I wasn't certain there was a true "fit" for our industry. After all, what does a manufacturer selling semiconductors online have to do with distributors selling MRO products online? Well, there is more in common than you may think.With many distributors looking to conduct business over the Internet, and with e-commerce being a relatively new strategy, there is a lot to be learned from the successes and failures of others.
First off, the original Web site of National Semiconductor (www.national.com) was years in the making before launching e-commerce on its new site, Buy.National.Com. This is no fly-by-night operation. There is strategic support from upper management, outside salespeople, customers and distributors. Part of the success of a Web site is how serious a strategy the company makes it. If customers and employees see it as just another marketing ploy, that is as serious as it is going to get. So, step one in any e-commerce initiative needs to be creating serious support for the product.
Not only does National Semiconductor have a sound Web offering, but it has figured out a way to sell online to existing customers by making the outside sales force champions of the Web. Phil Gibson, director of interactive marketing, told me that about three years ago National Semiconductor automated its sales staff, which got them comfortable using laptops and computer technology and, eventually, the Internet. So, today, asking the outside sales force to show off the National Semiconductor Web site to existing customers is a no-brainer. Step two, then, is to get your employees - especially salespeople -- comfortable with the Web.
I was impressed with how National Semiconductor went about creating online commerce, specifically that they included their distributors along the way. For example, the online order form includes distributors' actual inventory counts online. However, there is a catch. In order to have your inventory posted on the National Semiconductor Web site, you must be a Web-enabled distributor with a pretty robust Web site that can fulfill orders online. And, National Semiconductor must be able to get reliable inventory counts each night from your internal software system. Let's make step three this: manufacturers and distributors should work together to provide e-commerce for the customers.
The one caveat placed on the Buy.National.Com product is that National Semiconductor has the option to sell direct, but only if it needs to, according to Gibson. National Semiconductor wants to "aggressively promote the channel." It is up to distributors whether they'll be a part of this channel or not. The message National Semiconductor is sending distributors is this: get your systems in place and get e-commerce on your Web site. Then partner, partner, partner.
Aggressively promoting e-commerce with distributors makes the most sense for manufacturers. The National Semiconductor example proves it. It's not profitable for a manufacturer to become a distributor. Nor is it profitable for a manufacturer to eliminate its existing channels of distribution. However, it could prove very lucrative for manufacturers to pony up with their distributors online.
Are you ready?
Send your comments to Sara Procknow at sprocknow@cahners.com or call (617) 558-4289.
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