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Top 20 Stories of 2015: #19 Buffalo Electric’s Ride with AmazonSupply

Every weekday in December, tED magazine is counting down the Top 20 Stories of 2015. Below, the #19 most-viewed story of the year, originally published on June 2, 2015.

 

By Bridget McCrea

When tED magazine first spoke with Buffalo Electric Supply, Co., about its new relationship with AmazonSupply (now Amazon Business) for a January article, Patrick McCarroll, vice president, said the Birmingham, Ala.-based, family-owned distributorship had steadily been receiving new purchase orders on a consistent basis since uploading its first items on the site nearly five months earlier. McCarroll said getting set up with AmazonSupply, and then following the online platform’s shipping and packaging rules, was a time-consuming process. He also said AmazonSupply’s shipping guidelines were extremely precise and “substantially different than shipping out to electrical contractors in the field.” Roughly 75 pages in length, those guidelines include specifics around product packaging, shipping parameters and costs, and drop-testing of packages.

Fast-forward five months and tED magazine touched base with McCarroll to see how the relationship was progressing, what challenges it was presenting, and what opportunities the distributor was gaining from the alliance. Here’s what McCarroll shared with us:

tED magazine:  How is the relationship with AmazonSupply going? What are you seeing in terms of results/benefits?

Patrick McCarroll:  Relative to where we were a year ago, it’s great. Relative to where we want to be, we are going to continue to push ourselves to reap additional benefits of working with AmazonSupply. The ROI is not where we need it to be, but the knowledge we’re gaining is invaluable to Buffalo’s future growth.

tED:  In the original article, you mentioned specific “guidelines,” “regulations,” and “requirements” that need to be met to work with Amazon. Has this made the relationship challenging at all?

McCarroll:  The terms and conditions make some of the logistics a bit challenging, but the positives still outweigh the difficulties in building a relationship with AmazonSupply. Challenges such as specific regulations and guidelines are not due to their specific nature, but due to the fact that they change and will continue to change. Our processes and timeframes had to be adjusted accordingly to remain compliant. For a small business, that’s extremely difficult and demanding on our staff.

tED:  Based on your experience in this area, where do you see the world of e-commerce and electrical distribution in one year? Five years?

McCarroll:  That’s a tough question to answer. You look at the Graingers and MSCs of the world and their booming e-commerce businesses, and then you look at the giants in the electrical distribution industry and there’s a significant drop off at both the revenue generated and the percentage of sales. There are numerous explanations for this; be it investment from the distributors, customer preference, and territorial issues with manufacturers—the list goes on. Short term, I don’t see it being extremely detrimental to distributors with little or no e-commerce initiative, but long-term, I think e-commerce will continue to grow and it is the future. I didn’t see the point in ordering a pizza online five years ago and now it feels like an inconvenience to have to call an order in. As more of my generation enters into buying roles, it will become more commonplace, if not necessary, to have an efficient and functional e-commerce site. I think at that point, we will see a steady decline in what we know currently as the traditional sales model.

tED:  What advice do you have for those distributors who have not even started an e-commerce strategy?

McCarroll:  My advice would be to start small. This keeps your hands untied and gives you the ability to pivot your strategy as you learn. There are countless ways to approach going to market with your products, so find your niche and ways to differentiate your company online. As you increase your market area from your local shop to nationwide (or globally) via the Internet, not only does your competition increase exponentially, but you also have to take into consideration the agreements your company has in place with your manufacturers and the challenges that presents. The market also changes rapidly; you may have the best price one day, and then completely fall off the radar the next. You may have the number one ranking in several search engine categories one day, and may be on the third page the next after a change in the search engine algorithm. Establishing an e-commerce presence opens a company to boundless opportunities, but also in itself warrants full-time attention and dedication to foster its growth.

tED:  Do you foresee a time when Buffalo Supply doesn’t work with a company like AmazonSupply on its commerce strategy?

McCarroll:  It’s always a possibility, but for now this is something that is currently working well with our business model. This is the one instance where I treat AmazonSupply as a traditional B&M client. It has to be mutually beneficial to both companies. If something changes where both parties are no longer benefiting from the relationship, it will be time to move on.

tED:  How do Buffalo Supply’s employees like using AmazonSupply? Do you feel it helps position the company well with, say, Millennial employees who like innovative workplaces?

McCarroll:  It gives us opportunities we wouldn’t have otherwise—it’s an exciting, new frontier. It certainly empowers the team because there’s not a textbook with the answers to reference, which really allows our team to take a more innovative approach to sales. The learning curve required for the industry is steep requiring years of experience, and this might be a viable option to accelerate that curve, along with the traditional training methods. 

tED:  From what we know, electrical distributors often struggle in their quest to get sufficient/accurate data from manufacturers. Does AmazonSupply fill in the blanks and make it easier for the customer to recognize the products they want to buy?

McCarroll:  AmazonSupply does help to a certain extent by providing consistency across its website, which is an area that I believe traditional distributors haven’t quite mastered yet. However, you still are required to pull a great deal of the data and compile it yourself.

tED:  Is there anything else you’d like to add about the Buffalo-Amazon relationship and/or the future of electrical distributorship and e-commerce in general?

McCarroll:  It’s been an exhilarating experience where you can learn, turn a profit, and have fun. When you’re doing those three things, everyone benefits – both professionally and personally, and that’s what this is all about. Change is inevitable and often breeds negativity in a sense, but I think that e-commerce growth has just been brought to the forefront of our industry. Not changing is the path of least resistance, and while it might be convenient at the time – all companies must continue to change and evolve to remain relevant.

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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