Grainger opens Internet MRO superstore

By Staff -- Industrial Distribution, 5/1/2000

Chicago-In what it calls a "holistic solution" for MRO buyers, W.W. Grainger launched a superstore named TotalMRO.com with products from some of the other biggest names in distribution.

Opened in April, TotalMRO.com is different from Grainger's other recent Internet moves like OrderZone.com and FindMRO. com. Grainger hopes to establish a one-stop site that links to leading e-commerce networks run by companies like Ariba, Commerce One and Oracle, which many large end users use.

Any MRO distributor may participate, regardless of size. And Grainger officials also hope to link it to many of the emerging portals or e-marketplaces.

Initially, customers may only access the site through Ariba's e-commerce system, but TotalMRO.com will be available as a stand-alone Web site by the year's end. Ten national and regional distributors such as Motion Industries, Cameron & Barkley, Newark Electronics and Briggs-Weaver have already enrolled.

"It's really an unprecedented business model in that, for the first time we're bringing together virtually all MRO distributors into a one-stop marketplace to allow all facility maintenance people with one search engine to identify virtually all products from one source," said Elizabeth Olig, president of the business. "We intend to be supplier agnostic."

"This is not about a Grainger-branded solution," said Olig. "This is about letting the customer decide who the best solution is."

"It's all about customer choice, letting the customer choose who the best source is based on the current situation," she said. "Sometimes it's based on price-[end users] have a negotiated contact with an existing distributor and want a requisition to do that-sometimes it's a spot buy, and sometimes there is a manufacturer preference or a distributor preference."

Unlike some of the other MRO Internet malls, TotalMRO.com does not take title to products, but facilitates buying and selling. End users may see real-time availability of inventory, use pre-negotiated prices with distributors and limit searches to approved suppliers. In the future Grainger plans to add functions such as requests for proposals, auctions and industry news.

Motion Industries president Bill Stevens said his company is delighted to be one of the first participants. "It will ensure that we are accessible to all customers leveraging e-commerce technology," he said.

Other participating firms so far are Lab Safety Supply, Manufacturers Equipment and Supply Co., MetersandInstruments.com (a subsidiary of Transmation, Inc.), New Pig Corp., and Transcat.

Olig said the new venture should also appeal to small distributors that can't afford big e-commerce expenses. "It gives them a solution in the box without the investment," she said.

Grainger, which Olig said spent more than $80 million to develop its e-commerce initiatives, is beginning to see the investment bear fruit. The largest U.S. industrial distributor expects annual revenues of more than $250 million this year-up from $102 million in 1999.

In a related development, Grainger expects to triple the distributors selling indirect supplies on its OrderZone.com. site to 18 by the year's end. At press time, announcements were pending with a bearings distributor and a computer company, among others, Olig said. The site so far offers diverse products from lab safety equipment to office and computer supplies in addition to MRO. By the year's end, it will offer electronic payment, and Grainger has not ruled out adding distributors that compete with overlapping products.

In another measure of online sales growth, Olig says customers buying from Grainger's online catalog grow 4.5 times faster than others. Grainger estimates at least 25 percent of all its Internet sales are new business.

"You do get some cannibalization" of traditional orders, she said, "but if the customer is moving that way, you must as well."