Is E-commerce In Your Future?

By Ed Rigsbee, CSP

"Unbelievable, only one California distributor had a link!" In my recent opening keynote presentation for a group of industrial distributors, I mentioned that I was alarmed. Upon visiting a major manufacturer's web site, I conducted a distributor search for California. When the list appeared on my screen, only one distributor listed had a link to their site from the manufacture's site. It's unfortunate that so many distributors are slow to partner with their principal suppliers. For some distributors it is because they do not yet have a web site, hard as that is to believe. And for others it is a trust issue. Some distributors still believe that by sharing information, they will loose customers. How wrong they are.

Your customers might not be getting any younger, but their purchasing staff most certainly is. With this youth, also comes new ways of doing business. Younger people are quite comfortable with the Internet and many prefer e-commerce to "bothersome" visits from your reps. Just the other day upon leaving for school, my nine-year-old son asked my wife to find him some pictures of jellyfish for a school project. He proceeded to explain to her how to go to www.Yahoo.com and so forth to find the pictures he needed. She thought it was so cute. For technophobes, it's a wake up call!

E-commerce is taking on several forms from the straightforward Amazon.com style of giving your credit card number, selecting the items you want and receiving your purchase a couple days later via a delivery company to more sophisticated arrangements similar to what the automotive industry is putting together. I personally find CheapTickets.com both a convenience and a time saver, giving me a wonderful choice on my air travel needs. I might not have ever considered that as a possibility. But, a while back my travel agent started tacking on a $10 per ticket booking fee. Their new business strategy did not add value to our relationship in my eyes. Needless to say, I am no longer their client.

Back to the younger purchasing agent trying to work their way up the corporate latter. They are putting in extra hours, working late. Since it is late and manufacturers are closed, they go to ThomasRegister.com looking for a particular product supplier and find what they need. The manufacturer is a real partner in distribution and has distributor search capability at their web site. As with the earlier mentioned example, if there is only one distributor with a link that is where the purchaser goes. Will that be you?

Ford Motor Company is unleashing the power of the Internet for their employees around the world. It's taking a step forward to reach its vision of being on the leading edge of technology and connect more closely with its customers. In support of this vision, the company announced on February 3, 2000 that eligible employees worldwide would be provided a computer, printer and Internet usage at home for a nominal fee ($5 a month).

Ford Chief Executive Officer and President Jac Nasser said, "This program keeps Ford Motor Company and our worldwide team at the leading edge of e-business technology and skills. We're committed to serving consumers better by understanding how they think and act. Having a computer and Internet access in the home will accelerate the development of these skills, provide information across our business and offer opportunities to streamline our processes."

Ford Chairman Bill Ford added, "It is clear that individuals and companies that want to be successful in the 21st century will need to be leaders in using the Internet and related technology. That's what this program is all about."

Michael Dell, Chairman and CEO at Dell Computer weighed in telling business leaders attending the Windows 2000 Deployment Conference in San Francisco (February 15, 2000) for the new computer operating system by Microsoft Corp. He said, "The Internet will become as fundamental to your business as electricity. Businesses will need an information technology infrastructure that possesses the same attributes of systems that provide electricity whenever and wherever needed, at the click of a switch, to power anything from a small store to an entire city."

Dell mentioned that industry researchers forecast that 38 percent of U.S. households will have two or more personal computers by the end of this year and that by the year 2003, high-speed broadband Internet connections will be used in 33 percent of U.S. households. "In a world where every business is an e-business, Internet systems technology will no longer be just the concern of the information technology department. It will be critical to your customers' satisfaction and ultimately to your bottom line," said Dell.

To put Michael Dell's comments in perspective, Dell Computer Corporation is the world's leading direct computer systems company. This is based on revenues of $25.3 billion for the past four quarters (as of 2/15/00). Dell ranks No. 78 on the Fortune 500, No. 210 on the Fortune Global 500 and No. 3 on the Fortune "most admired" lists of companies.

This is just in from WALLY BOCK'S MONDAY MEMO -- 1 May 2000 (weekly e-newsletter). Bock states, "There were lots of studies and surveys out last week that give us some insight into how we're moving along the adoption curve of digital technology. Here is a couple. Net Portrait found that almost 60% of US households have a computer and that 47% of households have Internet access. Some of the others just stay late at work, where Greenfield Online found that 10% of workers stay late so they can access the Internet."

I recently listened to Tim Underhill explain to a group of distributors how their customers frequently pay three times for the same shipping and handling services in a discussion on the value of integrated supply. I sure do not want to pay thrice for a product or service, nor do your customers. In distribution today the game is adding value and streamlining costs in the distribution chain, not simply adding cost. While we are still at the early stage of e-commerce, sooner than you think, your customers will be demanding the capability of you. Will you be left in the cold?

When I started my career in outside sales in the mid 1970s, my boss, Ray Kahn told me that if I lost a major customer while paying attention and doing everything I could to keep them happy, that he could live with it. But, if I lost a major customer because of not paying attention, that he'd fire me. Was he serious? Absolutely—Mike, one of my colleagues, got the axe for just that reason. If you lose customers because you are asleep at the wheel in regards to the Internet and e-commerce, should your suppliers fire you?

Ed Rigsbee, CSP is the author of PartnerShift, Developing Strategic Alliances and The Art of Partnering. Rigsbee has over 1,000 published articles to his credit and is a regular keynote presenter at corporate and trade association conferences across North America. He can be reached at 800-839-1520 or [email protected]) . For a treasure trove of additional information and ideas, visit his Partnering University Web Site at http://www.rigsbee.com

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