2015 Planning Part 4 – Internet Sales

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time to planWith some wondering about how Amazon Supply and the Big Boxes might affect their business in 2015, now is a good time to pre-plan  how you face your customer online in 2015. Instead of reacting, now is a good time to pre-plan.

Big Box online sales are sizzling like Home Depot. Grainger surpasses $3B in e-commerce sales. Granted you are not Home Depot, Grainger or Graybar. But there is concern about onlines sales slipping away from the average electrical distributor. What your potential customer and existing customer sees becomes important.

With customers seeking to do business through alternative order entry means, for their own reasons, are you competing online? Better yet are your sales growing on your Internet offering?

How you look to your potential customer….is it about Customer Facing perceptions

“Customer facing! I’ve got sales people out there banging on doors and I have inside sales fielding calls, quoting jobs and faxes. What else can I do?”  Many will tell all who will listen that customer facing is about freshening up your web site and that is conquered space. With the change in customer facing technology, you need to relook and start planning. Normally it will require that you think about what you are offering in the way of products and value added services. Generally the development of your web offering is a continual project that should be built into your IT spend. But there are two really important issues that need your continual planning.

1. Web sales are catching on and are growing at a high rate. Just revisit the headline paragraphs above. Just take a look at Grainger’s increased web sales. Here’s an additional thought about web sales: Your cost to sell product on the web is a lot less than you think. It is hard for potential customer to argue about price if they are ordering for next day delivery. You could fill the order from any one of your branches.

2. There has always been a lot of money to be made in pricing. Maybe you don’t think so? So think about this:The next time you take a flight to industry meeting, poll the other passengers and see what they paid for a ticket. Then ask yourself: Should the new customer that orders with a credit card pay the same price that your bulk of your customer have been taught by your sales people to buy at?  More and more electrical distributors are appointing a full time pricing managers.They just don’t tell anyone about it. So why do they hire/appoint a full time pricing manager? There is real money to be made with the changing market!

As you attend the various meetings this fall, ask your fellow distributors how their Internet sales are progressing and then go back and look at the ease of use of their websites and then look at yours. Or better yet, do your investigation before you go to the meetings and compare your notes to what they have to say. Your fellow distributors who don’t brag are probably making more than you think.

These are not all the questions you’ll want to pre-plan and think about, they are good starters for 2015:

  • Just how easy is it for a first time buyer to your website/storefront to find and buy product? If they can’t find it, there are plenty of studies that indicate they will go someplace else. Ask around. Get a true third party opinion. This is a time for you to really honest with yourself.
  • Will you show prices? What price will you show? List, trade, market level or what price will you show? Do you have a full  pricing time manager.
  • Will you show actual inventory or that it is in stock? You should know from experience what are the most ordered items. Do you want to guarantee they’ll be in stock? Or have the top 500 you will guarantee to have in stock? How do you handle hard to get items?
  • Will you offer a competitive cross reference?
  • How easy is it for them to pay for product? On the other side of that transaction, how good is your security. Granted you are not a Home Depot and you are not the same size target, but you do need some assurance of security. What protection do you have that the credit card you accept, is a good number and not one that has been stolen?
  • What is your return policy? Who pays the freight?
  • On an Internet order, what is your freight policy?
  • Do you collect tax for that sale?
  • Do you offer suggested other items for the ones they are purchasing?

The number one issue beside SEO (the ranking of your website or search engine optimization), for a new buyer is finding your company and what they want either by description or part number and manufacturer. So this begs the real question: Do you really need to clean up your descriptions and part numbers? Be honest with yourself. Most need some sort of tweaking.

If you use your own part numbering system and expose it to a potential customer, then your descriptions and searches need to be really good and consistent. Both Trade Service Corporation and IDEA offer product data that has its strengths and weaknesses. Pictures or thumbnails of products are a big deal when coupled with product searches. So what % of your data has pictures, MSDS and installation movies attached to it?

Last question for 2015 pre-planning

Do you really know what or how your current customers view your goods and services? If you just want a pat yourself on the back, you can do your own perception survey, otherwise ask the Pros. We’ll do it for you.

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An experienced distribution business owner and industry consultant supporting distributors and manufacturers in areas of operational efficiency, ERP system evaluation and effectiveness, price optimization and profit generation. After over 40 years in the industry, Allen retired August 2016.

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