Distributors share Internet success stories

By Staff -- Industrial Distribution, 12/1/2000

Washington, D.C.-Distributors across the country heard first-hand details on how several companies are successfully using the Internet during a satellite broadcast Nov. 1.

"Success on the Internet: Real World Strategies for Wholesaler-Distributors," was sponsored by the National Assn. of Wholesaler-Distributors, IBM and Cahners Supply Chain/OEM Group. The 21/2-hour broadcast featured the experiences of Wilmar Industries, Inc., C.H. Briggs Hardware Co., United Stationers/e-NITED, and Jake's Finer Foods.

Wilmar Industries, a $625 million distributor of facilities maintenance products, has used the Internet to focus on two business objectives-growing sales and offering the same or improved service to customers; and improving its internal business systems. Since launching its primary Web site for transactions last March, online revenues made up four percent of total sales through October, vice president and chief financial officer William Sanford said.

Wilmar made sure its Web-based ordering could be combined with all back office functions so that customers would view specific pricing, order status, status of return credits and more, company officials said. The firm began to form an Internet strategy in 1998 by studying how maintenance engineers ordered products. It also asked its own customer service representatives who take orders what functionality they needed most, and asked sales reps how online ordering could streamline their role.

Sanford said another key function of the site is informing customers whether same-day delivery is available for replacement parts, for example. Since last spring, Wilmar has found that average order sizes on the Internet are significantly greater than traditional orders, sometimes 75 percent larger, and officials believe they are gaining market share from existing customers.

Wilmar executives were asked whether the outside sales force resisted the online offerings at first. Hugh Brian, chief information officer, said sales reps were encouraged early on to try it out, and given "scripted materials" to help introduce the site to customers.

"We said this is an opportunity to increase your prospecting, and decrease your order taking," Brian said. Before, sales reps spent an estimated 20 percent of their time doing manual order entry, Sanford said.

Sanford said he'd "be happy" if large institutional customers like property management chains buy 20 to 30 percent of their products on Wilmar's site, and he expects to capture nearly nine of every 10 dollars they spend online.

In another case study, C.H. Briggs Hardware Co., a Reading, Pa., hardware distributor, said using the Internet helps firms lower costs and be more competitive. CEO Julia Klein said that in a transaction-heavy business, allowing customers to order online, change shipping dates, check pricing and order history makes it more efficient for all. She said while gross margins have remained the same, the company's net margins are higher because costs are better controlled.