Is ecommerce in your plans? It probably should be. Whether it’s pressure from suppliers, buyers, or competitors, distributors are running out of time to put themselves online.
Proactivity and resilience matter, and ecommerce is moving from early adopter status to mainstream—with just around half of respondents stating that their website is commerce enabled. This according to a recent survey conducted by Channel Marketing Group that highlighted the increased demands by customers and manufacturers for distribution partners to embrace new channels.
The Many Outside Forces Cutting into Your Business
In the past few months, we’ve discussed an interesting trend in the distribution space—the increased competition from those outside your market. When pairing the half-decade-long push by Amazon into the B2B space with the newfound love for ecommerce by manufacturers, leaders at distribution firms are watching their industry change.
According to a recent MDM roundtable, “COVID-19 has accelerated manufacturer and distributor e-commerce initiatives by three years.” Reduced in-person interactions, increased demands for readily available information, and reinvigorated focus on shoring up revenue have resulted in a healthy push into the ecommerce space.
But here’s the thing—you don’t have to be a passive watcher. A move to an ecommerce mentality today can set you up for long-term growth, satisfying both your suppliers and your customers while giving you a resilient revenue model.
After all, according to a SalesForce survey, 89% of B2B decision makers attribute future growth to the success of their digital commerce program. If your B2B products and services are not available for your customers to purchase online—yet—or if your ecommerce platform isn’t integrated with your other business software, it’s time to consider your plan.It may seem like it will disrupt your business, but what in the past two years hasn’t?
The Manufacturer Push
Manufacturers are putting a priority in ecommerce. Whether it’s going to replace or empower their wholesale distribution partners lies in the hands of the distributor. As noted by MDM, manufacturers are investing more into driving sales via technology, spending more money than ever on digital marketing and attempting to push distributors in this direction.
“[Manufacturers] are spending more on digital marketing than ever before, investing in syndicating content to distributors who request customized content and, in some cases, manufacturers have personnel dedicated to supporting select customers’ e-commerce initiatives.”
Manufacturers appear to be doing everything within their power to do work for you—but if you don’t take the step, you could start to lose support from supplier partners.
Supplier Investments in Your Business Increasing
Many distributors have the workflows and relationships in place to make the move to ecommerce easy. Often, the problem often exists in the front-end. Product pages are hard, search engine algorithms are complicated, and the technology is somewhat disparate. But for many distributors, this is the area suppliers are putting in effort, investing in:
- Syndicating content to those who request/have invested into robust e-commerce offerings.
- Working closely with commerce-enabled “preferred” distributors to develop special promotions.
- Developing e-marketing content for e-newsletters as well as social media. Much of which can be co-branded with the distributor.
- Expanding their channels to market to pursue customers who are choosing to purchase online or search for material. In some cases, this is sales driven; in others the primary goal is increased brand awareness and sharing product content.
Suppliers want you to win—because when you win, they win. Though ecommerce resistant distributors won’t get killed off just yet, those who embrace it may find themselves in front of a national audience.
Putting in the Work for Your Suppliers: A Sign of Good Faith
From a supplier perspective, your ability to implement an ecommerce initiative is a sign of good faith. Your inability to do could be a sign that it’s time for them to embrace their own ecommerce sales model. For them, there’s always potential—the ability to pick up 20%-25% of gross margin is appealing. Though riskier for the manufacturer than you (storage space, relationships, and workflows differ), the increasing ease of use could make this more palatable in coming years.
Embracing the Technology
With the time consuming work being done for you, the challenge for distributors is this—putting in the effort to make ecommerce work.
Completing a sale, fulfilling the orders, and delivering timely service requires cooperation between multiple departments and business systems.
Making the Move: How to Make an Ecommerce Push Work
Whether you’re starting with a brochure-ware website or haven’t touched your three-page website for more than a decade, the path to making it work requires coordination. Back-end and front-end processes need to work together, and people need to see what’s happening. Inventory needs to work with front-end to provide customers information, credit lines need to be verified, and everything needs to flow.
To complete a sale, data needs to flow between marketing automation, point of sale, ecommerce, order management, inventory management, finance and accounting, business intelligence, and more. Integration matters, and often, success comes down to employing an all-in-one solution to connect it all.
Luckily for distributors, ecommerce is just an extension of current practices. Many distributors have the workflows in place to succeed. Order management would simply transition from the salesperson to the website. The main difference is that everything simply needs to happen faster.
To succeed, the right approach requires integration. You can depend on a cloud-based ERP to manage your back office tasks and an ecommerce system to handle sales and customer data—but if you want to provide accurate, consistent experiences for customers as well as your employees who work on various areas of client servicing, you’ll find a way to integrate the systems or start fresh by implementing an all-in-one solution. For instance,
- Acumatica’s Commerce Edition integrates Acumatica’s financials, sales, inventory, CRM, and fulfillment systems with popular ecommerce platforms.
- NetSuite’s SuiteCommerce combines both ERP and ecommerce system functionality including order management, inventory, merchandising, marketing, financials, and customer service.
MIBAR: Helping Distributors Transform Their Business for Decades
At MIBAR, we help clients assess their computing environments and match them with the right technology to fit their goals, budgets, and customer expectations. Since 1991, we have implemented ERP, CRM, BI, mobile, and eCommerce solutions for mid-market businesses across the entire Northeast. Get to know more about who we’ve helped and contact us for a free consultation.
Additional Distribution Resources
The Evolving Distribution Market: How the Largest Players Continue to Reshape Distribution
Regardless of Scenario, Cash Flow is Key: How Distributors Can Step Up AR
Diversification: Securing Your Spot in the Future of Product-Centric Businesses