I am seeing more and more manufacturers and industrial distributors using e-commerce as a sales channel for growth. The adoption rate has been much slower as compared to the online retail industry but B2B marketers are catching on fast.
According to a survey conducted in 2011 by BtoB and Rainmarker Systems, while only 35% of B2B marketers are involved with selling directly online, 58% of those companies have an increasing commitment to the channel.
Manufacturers have used e-commerce to sell components, spare parts and off the shelf industrial products for a long time. However, I have noticed a growing trend among industrial companies using e-commerce as their primary sales channel.
Industrial sales are different from online consumer retailing and so the e-commerce experience has to be different too. Manufacturers and industrial companies need to be mindful of differences such as:
- Ability to show different pricing levels depending on the type of visitor
- Build-to-order features and the ability to custom configure products with different options, trims, materials and operating conditions
- Live Chat and instant access to engineers for help with application and configuration
- Ability to save and print complete orders before purchase is important since multiple decision-makers may be involved and the sales cycle may be weeks and not instant
- Online cart should also support RFQs and not just transactions
- Accept purchase orders and bill to existing corporate accounts
Let’s look at some examples and let me start with a few 800-pound gorillas in their respective industries.
- MRO distributor W.W. Grainger – E-commerce business currently accounts for about $1.5 billion or more than 25% of the company’s overall revenue and is expected to account for more than half of its revenue in the next three to five years.
- Volvo Construction Equipment – Online sales and rentals of their entire range of products from Articulated Trucks to Waste Handlers. Using their online Build & Price application, I got an instant price for their MT2000 milling equipment that costs $726,075 along with financing and leasing options and a monthly payment calculator.
- Digi-Key – Electronic components distributor. Their Web site, launched in 1995, offers complete online commerce capabilities along with 24/7 instant access to a broad-based, multimillion dollar product inventory. Digi-Key can process orders – from order entry to shipping – in as little as 15 minutes (From their website). Annual Sales: $1.5+ billion with no outside sales force.
Here are two examples of two mid-sized industrial companies that use e-commerce.
- igus® Inc. – Developers of industry-leading Energy Chain cable carriers, Chainflex® continuous-flex cables, iglide plastic bushings, igubal spherical bearings, and DryLin linear bearings and linear guides. They’ve done a terrific job of creating an industrial website that is a valuable “go-to resource” with detailed but intuitive product selectors and configurators that integrate well with their online store. Nikki Groom (@IndustMarketer) and Courtney Toomey (@courtney_toomey) are two people over there that deserve a lot of credit for their online and social media marketing.
- Manncorp Inc. – Sells state-of-the-art machines that cover the entire surface mount production process, from prototyping to mid-volume assembly. The company’s products range from $50,000 to $200,000 and are all sold online.
Some manufacturers have reservations about adopting e-commerce in their sales process. My social media friend Tom Lee, Jr., Principal at Great Northern Products (www.gnpinc.com) that distributes specialty, industrial products for Process Safety Management and Mechanical Infrastructure Integrity protection, advises manufacturers to understand that:
- E-Commerce is not about replacing existing channels of distribution, but rather augmenting them for the global, networked economy.
- Industrial OEMs need to understand that today business needs to be conducted on both fronts, physical and digital.
Let me wrap up this post with another example:
Is e-commerce a part of your industrial sales? If not, what is stopping you or your company?