Bust The Barriers

ECOMMERCE 01Wholesalers need to make the move to user-friendly e-commerce quickly.

By Justin Yopp

There is nothing more frustrating than barriers to spending your money. Let me explain. My wife and I are wrapping up a kitchen renovation project on our midcentury modern home. As anyone who has remodeled a period home and tried to match existing fixtures knows, finding replacements for 50-plus year old fixtures is taxing. So we were ecstatic when we found out that our original lights are still manufactured by the original manufacturer in Detroit, Mich.

That joy quickly turned to frustration as we attempted to actually purchase these lights. We attempted to purchase the lights for the better part of six months and they’re still not in hand. Let me break down this experience for you:

1. We contacted the manufacturer, who sent us to a manufacturer’s rep.

2. That rep informed us we’d have to purchase through a local wholesaler.

3. We contacted the local wholesaler who assured us they had ordered the lights. Two months later, no order, no lights. We were so frustrated at this point that we cancelled the order with the wholesaler.

4. Back to the manufacturer’s rep, who after a few weeks, also assured us they had placed the order. Another month went by, no lights.

In the end, we found out that the order placed was rejected because it wasn’t the minimum order value. And so, we increased our order size to break the threshold, but still couldn’t find out what the freight cost would be.

In what world is it acceptable that in 2016 and 2017 a potential buyer can’t easily learn basic terms of sale such as a minimum order value and freight/shipping costs?

This this experience is a great, but terrible, example of how the frictionless world Amazon has created makes the intermediary-laden purchasing processes of B2B distribution feel archaic. We’re all consumers outside of work and therefore Amazon’s experience is shaping all our expectations for purchasing anything and everything. If Amazon can guarantee me 2-day shipping on pretty much everything under the sun, you can at least tell me I have a minimum order to place and what the freight cost will be before I place my order.

Intermediaries Don’t Always Make Things Easier

Here’s the thing about our experience with these lights – the manufacturer didn’t need those intermediaries, and the friction they introduced to serve their target market was a deal killer. We found the lights on the manufacturer’s website via the online PDF catalog. If the manufacturer had a simple e-commerce site instead of the PDF catalog, we could have easily placed the order. Our order could have hit the production management system of the manufacturer to get queued up, which could have been done at a lower cost to the manufacturer with significantly less friction for the buyer (us).

That very same e-commerce portal could also support wholesalers and distributors by using simple, role-based permissions driven off the login. These credentials could unlock special features, pricing, terms, etc. It’s really straightforward for most e-commerce sites. It’s an idea worth exploring as there are some great advantages to this kind of approach:

* A single interface to maintain, reducing management costs and creating a single point of truth.

* The ability to deepen relationships with role- and individual-based pricing and terms facilitated through the credentials in the portal.

* The opportunity to increase sales by expanding your potential market by opening inventory directly to consumers as well as decreasing friction for intermediaries.

This approach doesn’t make sense for every manufacturer nor for every product. It works great when products are easy to understand and details can easily be communicated on a website. Also, purchasing needs to be rather straightforward and customization is contained. Finally, expectations about production and delivery can be accurately managed ahead of and throughout the purchase and delivery process.

If It’s This Easy for Manufacturers…

So far, we’ve approached this from the perspective of the manufacturer, which should make wholesalers very concerned. Look how easily manufacturers can directly serve their customers and how customers may prefer that experience over dealing with intermediaries. Forget about customers staying loyal just because of the “relationship” they have with you. For products most likely to be consumed via e-commerce, the relationship won’t make up for the increased friction.

However, if you move quickly, wholesalers could easily own this value-building activity instead of conceding it to manufacturers. By establishing their own e-commerce portal and integrating their own inventory with the expanded universe available via distributors and manufacturers, they could create a deep, attractive market for manufacturers and their consumers (both businesses and individuals). Amazon, naturally, has taken steps to do just that – first with Amazon Supply in 2012, and now with Amazon Business. Pop onto their homepage and you can see that it’s credentials-based, already offers hundreds of millions of products, and has free 2-day shipping on orders over $49. And you can be damn sure listings included shipping/freight charges when it’s under that very direct-to-consumer minimum purchase price. 

Now, you may be tempted to dismiss my story because it was a direct-to-consumer purchase and that’s just not the market you’re after. Perhaps you think your target market and all the intermediaries in your value chain understand how this really works, and aren’t bothered by the friction. Perhaps I need to trot out the list of companies who ignored the signs of change and are now but shells of their past selves or worse, ended up shutting their doors. Alternatively, perhaps you see the opportunity in these increased expectations and are going to become the case study your peers emulate instead of the cautionary tale people where people shake their heads.

Justin Yopp is a marketing strategist at The Pedowitz Group. He helps organizations accelerate beyond best practices to quicker positive ROI, increase internal buy-in and adoption, and capture more market mindshare. Follow him on Twitter at @j_yopp or connect with him on LinkedIn at www.linkedin.com/in/justinyopp.  

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