One Strategy Distributors Must Implement in 2013To My Wholesale Distributor Readers:

Like many of us, I’m guessing you are wrapping up your 2012 sales and marketing efforts and are looking toward 2013 for ways to ensure your growth and on-going success. I recently read an article on Modern Distribution Management that called out three things you must do for success in 2013. I will go one better and simplify it down to one thing: Ecommerce.

In the MDM article, 3 Marketing Moves Distributors Should Make in 2013, author Jonathan Bein, Ph.D. suggests “taking advantage of ecommerce as a sales channel.” I couldn’t agree more. The days of the handshake-sales-model as the only way to grow a distribution business are over and Bein and I agree on this fact. It’s time to take your business online before your competition does–or worse, before AmazonSupply.com eats your lunch. From there, Bein and I differ in how to go about the implementation of your site. Here are Bein’s suggestions from his article:

  1. Deploy with a subset of your entire products, perhaps just your A items. This will accelerate the deployment of an initial site.
  2. Reduce integration with the backend ERP system. Initially, the number of orders per day is small enough that you can handle the effort to re-key data into an ERP or order entry system. Once they increase, then you can integrate with the backend.
  3. Hire a third party to do data cleansing and scrubbing.
  4. Subscribe to a SaaS or cloud offering rather than buying a traditional license. This will substantially reduce your initial cash outlay and the subscription is almost always an expense item rather than a capital one.

Here’s my take on those four suggestions, with a few recommendations of my own.

  1. Deploy with a subset of your products–perhaps your “A” items. My opinion: Maybe. If you are looking to take your site online quickly and ensure immediate return, this can be an option of how to simplify your deployment. However, with the right ecommerce partner and clean data, it probably makes more sense to bring the data over once for all products rather than segmenting the data upload into pieces and duplicating the data upload process.
  2. Reduce integration with the backend ERP. My answer: Only if you have time to add inefficiency to your sales and fulfillment processes. Who has time to be inefficient? Here’s the deal–Bein suggests that your ecommerce orders will come in at a slow enough rate in the beginning that you can afford to duplicate data entry on those orders. I don’t know about you, but I don’t have time to duplicate any work in my day on purpose. And what if your ecommerce site takes off? Backend integration is key to leveraging the efficiency of ecommerce. Without it, you’re just making more work. Integrate now and then fire up the ecommerce engines.
  3. Hire a third party to do your data cleansing and scrubbing. My answer: Sure, if you have the cash. If you can hire a data cleansing company that’s fantastic, just make sure you remember that you own the data–and it’s integrity in the long run. Be selective on who you employ to do your data cleansing and keep in mind that they won’t have the tribal knowledge that your employees have to fix any oddities that arise. (And they will.)
  4. Subscribe to a SaaS or cloud offering rather than buying a traditional license. My answer: Consider it. This is definitely a solution you should consider as you look at ecommerce platforms, but use the same scrutiny on the SaaS options you consider as you do on the licenses products. The most important thing about choosing an ecommerce platform for distribution is to choose the solution that is right for your organization. This might be SaaS, Cloud, or traditional license–make sure you consider all of your options.

Summary

It’s really as simple as this: For growth in 2013, implement ecommerce if you haven’t already. It’s the fastest way to increase sales, reach new customers, and trump the competition. (Think Amazon fools around about ANYTHING? Me neither–and they are in the B2B distribution ecommerce game with AmazonSupply.com.