What You Might Not Know About Your Relationship With AmazonSupply

By Bridget McCrea

Whether distributors align themselves with AmazonSupply or other online e-tailers is purely a personal choice, but there are some key considerations that should be factored into such decisions. 

In Testing Out the AmazonSupply Waters, tED Magazine revealed how one NAED member was exploring a new relationship with AmazonSupply and beginning to see the results of its decision to make this move. In the article, Buffalo Electric Supply, Co., expressed its frustration with its past and current web effort. “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.”

That experimental process can be traced across the distribution space, where trial-and-error is often the name of the game when it comes to online selling. As Buffalo Electric Supply reshapes its e-commerce strategy in hopes of a more successful outcome, other independent electrical distributors are doing the same. If and when the time comes to assess possible partnerships and alliances with large, online retailers, one of the most important questions these distributors should ask themselves is:  Is this potential partner a friend or a foe? 

“If you partner with this organization, you’ll be introduced to a huge customer base that wasn’t previously accessible to you,” says Angela Baraks, director of marketing at Sycamore, Ill.-based DATAgility, Inc. “That’s a big plus, but there are also downsides to consider.”

So while such alliances can give distributors new channels for selling slow-moving inventory or niche products that their “mainstream” customers may not be as interested in, if the products being supported “take off,” AmazonSupply may change the rules and go directly to the source and bring the products in house for fulfillment. “You don’t own the customer relationship,” Baraks points out, “and Amazon is very upfront about that. It maintains all ties back to the end user.” 

Creating Robust, Informative Websites 

In addressing the e-commerce- and manufacturer-centric frustrations of electrical distributors like Buffalo Electric Supply, Baraks says at least some of the burden falls back onto the shoulders of product manufacturers – not all of which have been quick to support distributors’ online efforts. “Manufacturers are going to have to decide how they want to support the distributors in this new digital marketplace,” Baraks says. “They need to have a strong relationship with sales, marketing, and now e-commerce departments in order for everyone to be successful.”

Content, for example, is no longer a “suggestion” but rather a “requirement” for distributor websites, Baraks adds. “Distributor websites need to be just as robust, informative, and reliable as the manufacturer products that are being sold on those websites,” she explains. “A great web store without good content is just as ineffective as a poorly functional website with good content.” Unfortunately, Baraks says most distributors have one or the other at this point. Or worse, they have a poorly functional website with poor data content. “Do not let your customers be one click away from the competition,” she stresses. 

After all, what’s not to say that manufacturers aren’t going to extend their footprints into the other online market areas by offering B2B websites that sell directly to buyers or end users, under a private brand label of their traditional products? “As a distributor, I would want to be well informed of the manufacturer’s e-commerce strategy and make sure my plans aligned with those of my vendors,” says Baraks. “ There are new opportunities for everyone; we just need to see who is going to go after them.”
 

Mastering the Art of e-Commerce
As electrical distributors continue to grapple with the realities of e-commerce and the demands of the online selling space, many face the same frustrations that Buffalo Electric Supply has been dealing with for years:  an inability to get e-commerce down to the science that it looks like Grainger and other large, international distributors have mastered. 

“When you get to the point where you’re dealing with multiple failed web implementations,” says Denise Keating, president, DATAgility, “you really have to question whether you have the right level of commitment and the right people behind the effort.” To overcome such challenges, Keating says companies need to fully commit to online success by adopting a mindset that goes beyond just, “Build it and they will come.” Then, engage the right people in the effort – both internally and externally. “There are companies out there that can help distributors wade through this whole world of e-commerce,” Keating points out, adding that defining web-centric goals and objectives is a good starting point for distributors looking to up their e-commerce presences without having to delve into the AmazonSupply arena. 

And even if online behemoths like Amazon, Home Depot, and Lowe’s (with its recently re-launched LowesForPros site, for example) are the anathema for your distributorship, that doesn’t mean you can ignore what they’re doing online. In fact, Keating encourages independent distributors to borrow a page (or even two) from these large firms – most of which do have their e-commerce strategies down to a science, and continue to hone them year after year. 

“Check out the big retailers and those operating successfully in non-traditional marketplaces to see what they’re doing; it’s more than just Amazon and AmazonSupply,” says Keating, who points to eBay’s electronic marketplace, Alibaba’s international selling platform, and office/equipment dealers like Staples and Newegg as a few of the retailers to watch online. 

“Staples has always been an office supply and equipment seller, and Newegg has always been into electronics, but now both companies are offering electrical and plumbing products,” says Keating, who adds that electrical distributors that limit their research and business intelligence efforts only to their traditional space are doing themselves a big disservice. At the same time, she says it’s important to understand that not all parts of a particular e-tailer’s online strategy will translate well in the electrical distribution space. “Understand what your competition is doing and how they’re doing it,” says Keating, “but realize that you don’t necessarily have to build your whole e-commerce strategy around duplicating what your competitors are doing.”

As with any business initiative, the focus of any good e-commerce initiative should be on the customer’s wants, needs, and preferences. “Put an emphasis on these factors, and on your own company’s strengths,” says Baraks, “and you’ll be able to retain your strong value proposition in the online space – just like you do in the bricks-and-mortar world.”