Every weekday in December, tED magazine is counting down the Top 20 Stories of 2015. Below, the #3 most-viewed story of the year, originally published on January 5, 2015.
By Bridget McCrea
Buffalo Electric Supply explores a new relationship with AmazonSupply and begins to see the results of its decision.
To say Buffalo Electric Supply, Co., is frustrated with the web would be an understatement. After building and orchestrating four different iterations of its own corporate website, the company – like many of its competitors – still hasn’t quite found the sweet spot of selling products to customers online. “Many of our online attempts have been a trial and error process as we try and develop a successful e-commerce site,” says Patrick McCarroll, vice president of the Birmingham, Ala.-based, family-owned distributorship. “So far, it’s been an experimental process.”
McCarroll says Buffalo Electric’s size has been a challenge online, where companies such as Wesco, Grainger, and Graybar tend to claim the most market share. “When you are a smaller, family-owned business competing against multinational/multibillion-dollar corporations, it’s important in your niche to be able to compete with them,” says McCarroll.
While he was asking himself that question in early-2014, McCarroll read the tED magazine article, AmazonSupply Steps Into Commercial Lighting. The article highlighted how David Shiller of Pittsburgh-based decorative lighting OEM sales rep agency Lighting Solution Development, had posted a call for new lighting vendors on AmazonSupply’s behalf. In his post, Shiller stated that the lighting and electrical buyer at AmazonSupply recently challenged Lighting Solution Development to bring him commercial lighting and electrical lines.
After reading the article, a light bulb went on over McCarroll’s head. If Buffalo Electric could align itself with one of the web’s 800-pound gorillas, would the independent distributor be able to more effectively position itself for success on the web? “We thought about it, we looked at the risks and rewards of the proposition, and then we took a leap of faith to see if it would work,” says McCarroll. ted”Partnering with AmazonSupply has been a great way to play in the market while internally restructuring our own e-commerce site.”
The Nuts and Bolts of It
Working with Shiller, McCarroll got Buffalo Electric set up as an AmazonSupply vendor. The electrical distributor serves as a “ghost” on the site, which doesn’t advertise the actual distributor’s name, but instead fulfills orders to customers as if it were supplying the goods itself. Buffalo Electric – which sells new products via AmazonSupply – has steadily been receiving new purchase orders on a consistent basis since uploading its first items on the site nearly five months ago.
While the process sounds straightforward enough, McCarroll says getting set up with AmazonSupply, and then following the online platform’s shipping and packaging rules, has been a time-consuming process. He credits Shiller – who serves as a liaison between the two entities – with helping the distributor learn and adhere to the guidelines set forth by AmazonSupply. “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.”
The original tED magazine article, for example, noted that potential vendors had to submit detailed product attribute spreadsheets that may have up to 50 columns (model #, voltage, wattage, CCT, etc); warehouse their own inventory; ship product with bar codes; and meet specific co-op requirements (i.e., 6% marketing allowance, for promotional emails, SEO, HD photos, etc.; 2% freight allowance, for Amazon handling all freight; and a 2% return allowance).
Those requirements have prompted some of Buffalo Electric’s own suppliers to opt out of participating in the AmazonSupply channel. “We’ve had some manufacturers embrace it and help us gather all of the data and put it in the right format,” McCarroll explains. “Others have said, ‘We’re not going to do it.” Still others are now asking how their wares are selling on AmazonSupply, despite the fact that they didn’t help the distributor get the right templates set up and data submitted.
E-commerce: The Double-Edge Sword
McCarroll, who sees e-commerce as both a major challenge and a significant opportunity for electrical distributors, says AmazonSupply’s shipping guidelines are extremely precise and “are 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.
And even though AmazonSupply pays the distributor’s shipping costs, the packaging and assembly requirements are much more intensive than a standard order that’s being shipped to an electrical contractor. “Packages have to be able to pass a 4-foot drop test on all sides,” says McCarroll. “If Amazon drops the package and it doesn’t pass that test, then they’ll just send the item back to you.”
“We’re not there yet but in the end, we will wind up with an effective, integrated approach across our business both for e-commerce and brick and mortar ,” says McCarroll, whose firm is currently hiring two interns from The University of Alabama – Birmingham’s industrial distribution department, to assist with those efforts. “While it’s taken a few attempts to find the right fit, we’re definitely starting to feel like we’re on the right track.”
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 firstname.lastname@example.org or visit her website at www.expertghostwriter.net.
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