Manufacturers Are Digitizing at Twice the Rate of Other Businesses, and What That Means for Distributors

The pandemic is driving manufacturers to rapidly mature their online capabilities and direct-to-consumer sales — a phenomenon that should make every distributor consider whether they're moving quickly enough.

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Many businesses in the United States have had to pivot to make it through the pandemic — offering new products or services and even changing up the way they do business. While a shift in the way a company does business may be less visible than pivoting to a new product or service, it is by no means less important and can have meaningful implications for its entire ecosystem. Case in point: small- and medium-sized manufacturers, a traditionally analog segment of SMBs, have started digitizing their sourcing and selling at twice the rate of other industries amid the pandemic, according to surveys of more than 5,000 U.S. B2B small and medium businesses by Alibaba.com, the B2B e-commerce platform that’s part of Alibaba Group. To be exact, the manufacturing industry increased online B2B trade 8 percent from December 2019 to October 2020. That jump now puts them on par with wholesale trade — one of the most analog industries — which saw only a one percent increase during the same period. 

The economic shock of the pandemic is driving manufacturers to rapidly mature in their move to online sourcing and sales, and their ability to sell directly to the end client — a phenomenon that should make every distributor consider whether they’re moving quickly enough into e-commerce. Here are some of the benefits of adoption and ways distributors can build an e-commerce strategy, access the estimated $23.9 trillion global B2B ecommerce opportunity and enter the next age of global trade.

The Path to Global

Over the years, I’ve personally spoken with so many distributors who would tell me that their business was the best-kept secret. They thought that was a good thing, and didn’t understand why they needed to be online or have a LinkedIn profile. I would tell them no, don’t be a secret — that’s not good for business! 

That is especially true now. Manufacturers today understand that e-commerce is a constant sales opportunity and are moving from asking why go digital to asking how do we go digital? Or if they’re already online, they’re looking to get the best return on time and investment for their efforts. This means wholesalers and distributors need to be asking the same thing not just to keep up and survive through pandemic-related challenges, but to reap an array of benefits. 

While connecting buyers and sellers virtually is the obvious benefit of e-commerce, the ability to go global and unlock more leads, more sales, and more growth through international trade is truly game-changing. We are seeing this reflected in the numbers: Cross-border business has become increasingly important for B2B companies during the pandemic, with 63 percent now reporting some amount of international trade, up from 59 percent in December, according to the Alibaba.com survey. This momentum will only grow after the Covid-19 vaccine is more fully distributed throughout the U.S. and the world, and as we emerge through these difficult times. Because even as companies return to some semblance of normal, most customers now expect to be met and serviced on digital platforms. In other words, there is no turning back.

To stay competitive and meet this future head-on, distributors need to be online and part of the virtual value chain in ways that play to their strength — knowing the producers, the products, and the markets.

Your Digital Checklist

Once your business is ready to go online, there are certain things you can do to set yourself up for success. These five tips will help you implement an effective e-commerce marketplace strategy. 

  1. Follow the customers. To find out where there is demand for your products both domestically and globally, you’ll want to select an online platform that has significant reach and that also allows you to target specific audiences, markets, and regions. While larger distributors may be able to create their own marketplaces, existing marketplaces with e-commerce capabilities like Alibaba.com can enable you to reach millions of customers in the US and globally with 20 million-plus annual active users from 190 different markets.
  2. Build a robust storefront. Once you’ve chosen your platform, it’s time to build your e-commerce storefront. B2B companies that sell goods online typically have 2.3 times the industry average growth, according to the 2019 U.S. B2B Ecommerce Market Report, so you’ll want to be strategic in your approach. Be sure to build a complete page that gives customers a ton of information up-front and publishes high-quality product descriptions and photography. Keep customers coming back by checking your messages regularly and quickly responding to queries (within the hour, if possible) with notes that are personal and demonstrate flexibility. For example, being willing to adjust your minimum order quantities to help out a customer can inspire loyalty.
  3. Access real-time pricing trends for industrial goods. You’ll want to make sure you are setting prices that are competitive and attractive, so line up access to research into the latest prices for products similar to yours in multiple international markets, and adjust pricing when necessary.
  4. Dedicate the time. An e-commerce platform is a powerful tool for selling and relationship building, and the more time and energy you spend on your product page and strategy, the more you will get out of it. Opening your store is great, but not enough — you’ve got to do the work.
  5. Tap into high-quality global supply. The right marketplace will give you instant access to countless producers around the world. Be sure to take full advantage of the global opportunities at your fingertips by increasing your bench of producers and adding depth to your product listings by sourcing from hundreds of thousands of international manufacturers and wholesalers. 

Going digital is not only a powerful way for distributors to reach new customers and new markets—it is a necessary and pressing one, especially now that manufacturers are accelerating their own digital journey. 


Curt Anderson is an expert on e-commerce for manufacturers and founder of B2Btail, an online resource of e-commerce insight.

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