At a virtual crossroads

With so many e-commerce options to choose from, don't feel left out-yet

By -- Industrial Distribution, 5/1/2000

You've likely heard the warnings many times by now: Put the pedal to electronic commerce or get off the road. The writing's on the wall, and this train's leaving the station.

Let's go beyond cliches. The choices for doing business over the Internet are not always simple. If you've decided, like many distributors have, that it's time to do something, the available options might seem less like choices than flanks you must cover on a battlefield. You're certainly not alone.

Consider some of the options and costs to address them. Just for starters, what to do with your paper catalog or line card? A discussion of putting it online may hinge on whether your products are largely commodities or highly engineered and project-specific. Then, what's the expense to put it online, and by what methods should customers be able to search for products?

In addition, can you afford to develop a Web site that handles transactions, tracks customers' preferred suppliers, the status of their orders and buying history?

Many firms can't or don't want to develop catalogs and Web sites with those capabilities by themselves. That may lead to a discussion of which-or how many-e-marketplaces to partner with. There's certainly no shortage of dot-com MRO malls or vendors that will convert paper catalogs, and construct and maintain Web sites that transmit orders.

In addition, some distributors are taking another route. For some, a higher priority is linking to customers' purchasing and plant maintenance or asset management systems-which may involve using closed, proprietary networks as well as connecting through open Internet malls.

Every few weeks, the dot-coms and e-commerce vendors announce a new wrinkle to these options. And none of these choices necessarily rules out any other. So don't feel like you've missed that train if your e-commerce strategy isn't set in stone yet.

In fact, given the speed of e-commerce change, it's probably better not to be tied to one strategy.

As one measure of this uncertainty, consider a recent ID survey of 273 Industrial Distribution Assn. members. Of those that have Web sites (85 percent), only one-third say their sites offer customers the ability to buy products online. That will soon change dramatically, as about three-quarters of those companies that currently lack ordering capability plan to add that within a year.

The survey, which is published in ID's ASMMA/I.D.A Spring Convention Guide this month, also reveals that a slight majority of distributors selling online expect less than five percent of their sales to come from the Internet. About one-third of the firms expect online sales to be between five to nine percent of total revenues.

One e-commerce authority, Elizabeth Olig, president of W.W. Grainger's new superstore, TotalMRO.com, was recently asked why more distributors and manufacturers didn't embrace online selling earlier.

Olig responded that more early barriers existed for this industry-fewer companies were online to begin with. But those walls are crumbling fast. "The adoption curve has really changed in the past 18 months," she said.

To help our readers face these choices, ID plans to provide more how-to-do e-commerce articles throughout the year. This will include examples of companies using some of the different approaches like the major e-marketplaces. For example, April's edition featured profiles of the emerging MRO portals with details on their niche, fee structure and strategies.

Ken Brack is Web Manager of ID Online. Your comments are welcome at kbrack@cahners.com.