The following is a sampling of the verbatim comments from participants about the numbers of Web sites, how they select them, and what effect e-commerce will have on the role of distributors. “The more sites that can be used for your products the better. We should use whatever sites are available to us,” noted a marketing person with a machinery builder. “Short-term, we’ll use all available free sites, plus our own Web sites,” said an owner of a machinery manufacturing company. A marketing person for a materials manufacturer put site selection into perspective: “I believe we’ll be involved with a lot of sites, which will then be ‘naturally selected’ down to a few.”
Others more selective “I am skeptical of the proliferation of e-commerce in general,” reported a customer service worker for a closure manufacturer. “There is a place for e-commerce in closure marketing, but I don’t see a clear path.” An Ohio materials manufacturer’s manager was also skeptical. “I have not had good experiences with other Web sites, especially those that market their services as ‘bidding’ sites,” she reported. “We intend to stay with our own site, and potentially with links to industry or publications sites.” Many others took wait-and-see positions. “Initially, we’ll sell via our own Web site until the e-market develops more fully. Then we may add packaging-specific sites,” said an engineer for a materials manufacturer in the Northeast. Other respondents were more critical. “E-commerce is like marketing in the Yellow Pages,” reported a salesman for a materials distributor. “We believe in finding the ones that work and we’ll get out of the rest of them.” The representative for a distributor of both machines and materials was more caustic: “There are too many venues, and they are all acting like leeches. E-procurement seems to work for commodity items, but not for specialties where relationship selling remains the norm,” he stated. “We prefer to market via our own site,” said a salesman for a flexible packaging converter. “The alternatives present problems with politics, favoritism, and being lost in the crowd.” A participant from a distributor of machinery and materials was sarcastic. “Proliferation is a good thing because it confuses and complicates the use of the Internet,” he stated devilishly. “We’d rather see the personal sale than the Internet sale.” While many respondents preferred to handle e-commerce over their own sites, some are holding back. “We are entering e-commerce through a neutral packaging marketplace,” reported a respondent in management at a materials supplier. “The costs of building our own site are astronomical and we can’t envision a return on investment. However, we will not work with a site that is not neutral, like one owned by a company or association. We don’t believe those will last or work.” Another participant from a machinery and materials distributor saw a two-tier approach. “I personally would lean to company sites for procurement. We think customers will use industry sites as a reference to find those sources.” A manager for a systems integrator elaborated on that. “We will move to the sites that our current customers prefer,” he pointed out. “In the end, it’s a customer-driven event.”
Distributors squeezed? Manufacturers and distributors of packaging products aren’t totally sure how e-commerce will affect their roles. “We need to work with distributors to determine their ability to tap this channel,” reported a vice president of a plastics manufacturing company. “If they’re unwilling or unable, they run the larger risk of being left out of the development of this channel. E-commerce is just another channel; it won’t be perfect or even preferred for all transactions.” “Distributors are a difficult issue,” said a manager for a blow molder in the Midwest. “Our intent is to compensate those members of the supply chain that may be affected by our e-presence.” A manager for a machinery builder agrees: “Deconflicting the e-sales from our distributors will be very difficult without alienating them. And they are our customers, too.” A salesman for a major packaging materials supplier is uncertain. “We’re not sure yet what the fall-out may be from changing the distribution channel,” he noted.
Can’t be replaced? Many other respondents said they didn’t see a conflict because manufacturers really need distributors to service local accounts. “Distributors that service end users purchasing through e-commerce sites should be compensated,” said a salesperson with a machinery builder. “E-commerce [alone] cannot service these accounts.” “We have a company that will build a distributor locator into our e-commerce center,” stated a manager for a machinery builder. “That means an order will go directly to the distributor. We have no plans to disintermediate them.” A representative for a blow molder in the East saw it a different way. “Many distributors are setting up their own sites to avoid being squeezed out,” he said. “This keeps them in the supply chain while it can reduce costs for the manufacturers.” The representative of another container maker is handling it in a different way. “We want to provide links to our distributors. It should enhance what they do today, not compete with it.” A participant from a manufacturer and distributor of materials can see an interlock. “Web site exposure would complement our distributors by allowing our customers to learn more about our products. This saves both time and the money of printing a lot of brochures about our products,” he pointed out. Needless to say, respondents from companies that distribute packaging products strongly felt they were critical to transactions. “We serve a specific customer base to which we provide multiple products,” said a manager for a distributor of both machinery and materials. “We consolidate their purchasing process and provide just-in-time delivery, so we’re providing added value.”
See the story that goes with this sidebar: 'Yes' to Internet sales; 'Maybe' to Distrubutors
