Find solutions built to last

How to succeed in selecting an e-commerce provider-without its being trying

by Alberto J. Cassola -- Industrial Distribution, 2/1/2001

With the current shakeout among e-marketplaces-and the shutdown of some promising and highly touted online ventures (Chemdex and PurchasingCenter.com, to name a few)-it's not surprising that industrial distributors' stomachs churn as they look for the right e-commerce solution. It's a tough decision; so many B2B e-marketplaces are simply failing to deliver on the promise of long-term value to customers.

In light of the fast pace with which e-commerce providers come and go, there are some key questions that distributors should ask as they seek an e-commerce partner to help them implement or re-tool their online selling strategy.

Is the e-commerce provider tuned in to the needs of the industrial distributor? Some have next-generation technology, and it's easy to be impressed with the bells and whistles. But, how well does the provider understand your industry, and your target market? This should be at the top of your list.

What is the provider's technical expertise? Yes, understanding your marketplace is key, but e-commerce is about the technology! Does the e-commerce provider have a solution that's the state of the art for your industry's needs? Is it scalable to accommodate a small number of parts all the way to 100,000 or more products? Will it help you support your current customers? How secure is it? Will the provider keep the technology current without passing the development costs along to you?

How will they bring traffic to your site? And is it the "right" traffic? "If you build it, they will come" does not apply here. Unlike a "Field of Dreams," a great ball field does not guarantee a full stadium. Do they "get" the difference between industrial and consumer buyers on the Web? You can build your presence on the Web, but it's essential you build traffic from industrial buyers. Make sure you understand how they plan to get customers to your site.

How will the e-commerce provider convert your product information into an electronic catalog? Getting detailed information on tens of thousands of products into an e-marketplace is a monumental task. Will the provider enter all your data, or give you the software to do it yourself? And, by the way, how will the content be kept up-to-date? Make sure that this is addressed before you make your decision.

How many buyers and sellers are using this e-commerce platform? Be sure that they have built a "positive network effect." In other words, the e-marketplace must have a critical mass of both sellers and buyers using the system on a regular basis. Be sure there's a sufficient buyer/seller load balance.

Has the provider proven itself in the marketplace? Make sure your business is not the test company for the e-marketplace. Obviously, someone has to be the first; the good news is it doesn't have to be you. There are established industrial exchanges with track records that demonstrate how other distributors have successfully added an e-commerce capability.

In short, make sure that your e-commerce solution is built to last. If your provider goes away, you may have to start over again with a new investment. By asking the right questions up front, you can secure a partner that will deliver substantial, long-term value for your business.

Alberto J. Cassola is vice president of Thomas Regional Directory Co. and ThomasRegional.com.