How to Optimize your Online Business Collaborations
By Abe Cherian - Copyright © 2005
As a manufacturer, importer or distributor, you are facing
today's difficult business challenge in how to compete and
succeed in the Internet economy. Your traditional channels
of sales and distribution are being or should be recast to
take advantage of the Internet and this implies new ways of
utilizing your reseller or channel assets.
While you and many other companies feel the pressure to
sidestep competitors with a first-to-market advantage,
there is little benefit in aimlessly building and
implementing e-commerce systems. Many companies are taking
a haphazard approach to the Internet, trying to shoehorn
existing business practices into simplistic e-commerce
capabilities or worse, drastically changing current
effective business practices.
A more sensible approach is to determine how to use the
Internet to optimize and extend your company's established
sales methods and align your e-commerce strategy with your
company's overall goals. The question is not whether you
should utilize Internet sales channels, but how can you do
so in a profitable way without alienating your existing
distributors, resellers, dealers and clients.
But where do you start and what are the essential elements
of a collaborative commerce solution? Before embarking on
an e-commerce strategy you need to ask yourself a few
important questions on how you will relate your business
needs with those of your reseller partners.
The Gartner Group estimates that over 90% of manufacturers,
importers or distributors do not sell their primary
branded products online. Why? The primary reason is channel
conflict; fear of the consequences of going into business
against your own selling partners.
Therefore, typically many manufacturers or primary
distributors establish a website that simply helps
customers gather product information and build a shopping
list, which they can then take to the nearest physical
store. Ultimately, your website does not close the sale and
has no visibility into whether these customers actually
purchased your products from your reseller.
Not only do you give up the rights to a new revenue stream,
but you also lose control over, and insight into, the
commerce activities within your own customer base.
But, what if you could provide customers with a unified and
guided selling experience across your sales channels by
presenting a seamless selling experience to your customers
and site visitors while integrating the value-add of your
reseller network? Your customers could access real-time
product information including pricing and availability
through resellers directly from your web site and their
respective web sites.
And what if your e-commerce system could ensure that
products were properly configured and orders routed to the
appropriate sales partner? This way you would remain
intimately involved in the e-commerce activities of your
resellers, while maintaining influence over the sales
process and customer experience.
You must determine which of your sales channels to take to
the web. You may presently utilize multiple channels to
respond effectively to your customers' needs such as your
direct sales teams plus a mix of resellers, retailers,
OEMs, and dealers who deliver value to your customers and
strategic value to you by providing you with global and
vertical reach, logistics and additional value-added
services.
It will be necessary to formulate an integrated strategy
that provides a common infrastructure for all of these
sales channels that you take to the web and then provide an
e-commerce infrastructure that integrates all of them
within a single cohesive system.
This online collaboration will allow your active
participation in all aspects of your customer's sales and
marketing experience, from shopping and product
configuration to fulfillment and feedback. Short-term
rewards include reduced costs through process automation
and efficiencies. Long-term rewards include increased
revenue, greater customer and partner loyalty, and the
ability to create strong sell-side partnerships that help
differentiate products.
Your resellers want to work with you, yet an Internet
business strategy that does not consider all your relevant
sales channels, including their sales and distribution
models and related business processes is a recipe for
failure.
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