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The Distributor’s Guide to Getting Started with E-commerce

It takes three main components for distributors to launch a successful platform.

Ready to offer your customers an eCommerce experience they love, but don’t know where to start? Your customers are unique to your business. You’ll have to work hard to understand how to best connect with them digitally. Fortunately, you are walking a road that has been traversed before. You can learn from my many mistakes.  

There are three main components of a successful B2B, wholesale distribution e-commerce platform: customer-specific pricing, product availability and lead times. 

1. Customer-Specific Pricing 

A customer won’t buy from your e-commerce platform unless they believe they are getting your best price, every time they login. This can be challenging if your pricing is geographical, or shifts based on commodities that change frequently.  

Building a pricing integration is one of the toughest parts of launching an e-commerce platform. This becomes complicated further if you have a business model where your counter/phone sales often adjust prices down for customers during an interaction.  

Many companies will show the highest possible price on their e-commerce platform. This guarantees your customers won’t adopt it. Showing the customer their best possible price will help remove some of their barriers to adoption.  

Keep in mind that even though you may have some lower margin product sales by showing the best possible price, you should be increasing the total average of each transaction with the right upselling and cross selling.  

Even though you may not be a programmer, one of the best first steps you can take is to get a group of pricing and sales folks in a room and map out the logic for pricing. Even the exceptions. A good integrator will transform that into the code base you need. The hard part is getting the logic down, not the coding itself.  

2. Product Availability 

Customers want access to two main categories of products: 

  1. SKUs they order on a regular basis; 
  2. Products that aren’t a regular stock item, but are needed occasionally. 

If you limit your customers’ access to a small set of products, like in a microsite, you’ll find some people at their company won’t adopt. I’ve seen this play out a few times — especially with safety teams. 

The safety team has selected safety products that meet the specifications of the jobs the crews are assigned to work. They want to control what is purchased for safety, so they set up a microsite with a vendor with all of the approved safety gear.  

But the field associates don’t like having to go to multiple sites or vendors for different types of products. Buying safety at one supplier and then buying bolts somewhere else is inefficient when they can get it all at one place.  

The purchasing team doesn’t like having the additional invoices that have added administrative costs. The best solution is to offer a customer-specific shopping experience where they can easily see their approved products but can also shop through the rest of your offering. 

You want your customers to have access to all of your products. It’s just good business. Try to stay away from very limited product offerings, even if your customer’s executive team asks for it. Often, they don’t know how the folks actually ordering will feel about adopting multiple systems. This could backfire when you roll out your solution. 

3. Product Lead Times and Delivery Confirmations 

When a customer calls one of your associates, do they ask for an estimated delivery date? If so, they will expect the same type of information on your e-commerce platform. Their experiences on consumer platforms like Amazon will drive this expectation as well. 

The problem with lead times is it exposes other operational issues within your company — bad stock counts chief among them. You may have good people who make a Herculean effort to care for a customer when there are stock issues. That’s great, but it can cover up a broader problem. 

To get started, sit down with your field, pull any data you have, and build a matrix to predict lead times. You’ll want to take things like bulky, hazardous and UPS shippable into consideration. The goal isn’t perfection, but to get a matrix that is right at least 80% of the time.  

Take the matrix and do an analysis of orders that are coming in on a daily basis. See how well your matrix holds up to real world, offline transactions. Add some padding to your predictions. Better to under-promise and over-deliver when it comes to lead times. 

When you build lead times into your platform, instruct the integrators to collect lead time predictions and store them with each order. Then, pull back delivery information and compare to the prediction. Over time, you’ll get a big enough data set that you can apply AI in real time to predict highly accurate lead times.  

Looking for a digital action plan? Come to MDM’s Digital Distributor Summit and attend our pre-conference session with Justin King, who has helped many distributors navigate the choppy waters of digital transformation. 

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