Madison Electric Products’ vice president of marketing chimes in on AmazonSupply’s move into the electrical distribution arena.
by Bridget McCrea
When Rob Fisher read the recent tED Magazine article detailing how Buffalo Electric Supply was exploring a new relationship with AmazonSupply, one of the first things that came to mind was: “This is an important story for distributors to read.” As vice president of marketing for Cleveland-based Madison Electric Products, a manufacturer of electrician-developed electrical products, Fisher says that while not all distributors will be a good fit for AmazonSupply’s model, some are prime candidates.
“I’ve been preaching for two years now that Amazon could be a good fit for distributors that are looking for an e-commerce solution,” says Fisher, who read with interest the trials and tribulations that Buffalo Electric faced in its own quest to develop an effective online selling strategy. And while he acknowledges that some distributors have successfully implemented and honed their own individual web strategies – namely those with enough resources and financing to do so – Fisher says there are many more small- to mid-sized firms out there that can’t afford the $10,000+ investment required to do e-commerce effectively.
To the latter, Fisher says he sees nothing wrong with using a third party like AmazonSupply as a primary or alternate e-commerce solution. “As a company, Amazon has a great marketing backend for organic search engine optimization (SEO),” Fisher explains. “Once you get through all of the ins and outs of Amazon’s requirements around packaging, shipping, labeling, and other details, the process becomes pretty simple.”
Addressing the Apprehension
But what about the prevailing apprehension that independent distributors have about Amazon and the fact that it’s clearly making moves into the electrical/contractor industry? “It’s a tough call,” Fisher admits. “It’s not like you have to do it in order to be [successful online], and in a perfect world every distributor would have its own e-commerce solution. Unfortunately, that’s not realistic due to the expense and time involved.”
With the understanding that the word “independent” means just that – independent and doing it on your own – Fisher says distributors should at least acknowledge the fact that Amazon is here to stay. “It’s not going away,” he points out, “and you’re not going to ‘shut it down.’”
“Distributors need to find ways to utilize what Amazon has to offer, which include great online marketing and a greater reach,” says Fisher. “For example, a distributor here in Ohio could be doing business with contractors in Ohio through Amazon, and actually wind up growing its market and market reach as a result.”
Addressing the Downsides
As with any new business arrangement, there are also downsides that should be factored into any decision regarding Amazon – namely, the e-tailer’s pricing model. Clearly the low-price leader across many categories (particularly on the business-to-consumer side), the company’s model could pose challenges for the distributor that’s worried about shrinking margins. “When you’re setting your pricing on Amazon, you have to be aware of the margins and pricing structure,” Fisher warns, “and then set the pricing appropriately so that the [e-tailer] doesn’t end up undercutting your own sales.”
Fisher also warns distributors to be prepared for a learning curve – at least in the beginning of the relationship. To distributors that are considering AmazonSupply as a potential sales channel, Fisher says the best approach is to start out small with a single product category. “Don’t try to just upload everything at once; start with smaller bites,” he says. “Take one product category (20-50 items at most) at a time, get all of the necessary data attributes for those items, and then use that information to create templates.”
According to Patrick McCarroll, Buffalo Electric’s vice president, getting set up with AmazonSupply, and then following the online platform’s shipping and packaging rules, has been a time-consuming process for his firm. “The template of data that sellers/manufacturers are required to submit has definitely presented a learning curve for us,” says McCarroll. “It has been a team effort between our staff, manufacturers, and their representatives to obtain all data and information needed in order to move forward.”
But what if getting the data from suppliers is a challenge for your distributorship? Fisher says the best move is to “push back” on your suppliers. “Let them know that the manufacturers who are willing to participate and develop the data for you,” he advises, “are the ones that will be ultimately rewarded with business growth and a stronger partnership with your company.”
Operating in a Changing World
As the electrical distribution industry continues to wrap its mind around the fact that huge e-tailers like Amazon and Lowe’s are vying for a slice of its pie, now is the time to think about the future as it relates to online sales. “Distributors and manufacturers both really need to look at new ways of doing business and innovative ways of partnering,” says Fisher. “Our world is constantly changing in terms of technology, business operations, and customer service. And that change isn’t going away anytime soon.”
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McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.
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