It's e-business, stupid!

Web-based selling is only a first step to connecting with customers

By -- Industrial Distribution, 12/1/2000

If there's one thing we've learned in the past six months, it's this: E-commerce by itself won't get it done.

E-business will, however.

What's the difference, you ask? Plenty. Too often, e-commerce merely means putting your product catalog online or joining a fledgling exchange, and trying to get the small machine shop or plant buyer to purchase from your Web site. That's the sell-side version many distributors have tried out this year.

E-business involves much more. It means making both your internal and external processes more efficient by using digital technology - and connecting the two sides seamlessly. It means providing your customers and suppliers with more information, collaborating with them to provide product application and other technical data, inventory and delivery status, even allowing end users to page or talk to your sales reps from your Web site. This will require spending more than it takes to throw up a Web site or even paying someone to host your Internet storefront.

As consultant Michael Marks told members of the Assn. for High Technology Distribution this fall, it's about becoming a "digitally-aligned supply house" and strengthening relationships with your customers. It's "not just schlepping products" over the 'Net, Marks said.

Selling products like many retailers do online just won't cut it. You may attract bottom feeders shopping on price for commodities like fasteners or hand tools. But if you sell more engineered products, or want to improve services like helping end users specify products, the storefront approach alone probably won't keep you in the game. Many of us saw in 2000 that just because you build a site, it doesn't mean anyone will come.

That's not to say e-commerce is going away. Some industry officials call Web-based marketing and sales the first step to conducting e-business. It's important for distributors to see the distinction between the two and set your sights on the real prize.

It's time to look deeper into e-business or how to automate your business processes. Marks, for one, suggests distributors should add these items to help customers: access real-time inventory; determine their price electronically; review order history and aggregated invoices. Other, smaller steps to beef up your "external" presence include adding Web content like maintenance manuals, regulatory and pricing data, industry news and links to suppliers.

Internally, you should consider tools that will create a digital knowledge base in your company and streamline the workflow for your sales force. Modern Group Ltd., a $170 million distributor of material handling and construction rental equipment, provides its salespeople prospect lists generated by Dun & Bradstreet based on SIC codes, types of companies and other attributes, for example. Modern Group's salespeople also use Microsoft Outlook to build a database of clients, quote tools, activity and calendar management and more.

As a first step internally, Modern Group CEO David Griffith suggests you provide most, if not all employees, with high-speed Internet access. His Web site makes it easy to reach any employee-and all 600 are trained to answer e-mails three or four times a day.

Just some thoughts to consider as you move beyond the e-commerce hype.

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