Progressive Distributor - Focus on B2B, not b.s.

Focus on B2B, not b.s.

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To some distributors, talking about business-to-business (B2B) e-commerce is like having a conversation about a far-off fantasyland. To them, all this hype about B2B is nothing more than b.s.

Others say e-commerce has already affected their business.

A regional manager for Applied Industrial Technologies recently told me he is seeing a new breed of buyer emerging. Theyre young engineers who have grown up with computer technology.

You cant walk into their office with a catalog under your arm, the sales manager said. They want to pull up your Web site when they need product specifications.

Ive never been shy about picking sides in an argument. So you can plant me firmly in the corner of those people who predict that e-commerce is going to reshape the way the industry does business.

Im not a techie, but even I can understand how this new eXtensible Markup Language (XML), the universal language designed to make it easier to build Web documents, will give companies more flexibility to do business on the Internet. But the programming language (or as I like to think of it, geek speak) is only one reason why e-commerce will reshape traditional distribution business models.

The other reason is that e-commerce offers, at long last, a way for distributors, suppliers and customers to take costs out of the channel.

Several players inside the channel are hoping to get an early leg up on the competition. Distributors with deeper pockets, like Grainger, Applied and Fastenal, are investing millions in Web site development and forming alliances with technology providers. Smaller distributors are building Web sites and talking to their distribution software providers about how to provide Internet connectivity to their back-end systems.

Companies from outside the channel are also entering the fray, including Ariba, Commerce One, and ProcureNet.

Its difficult to separate fact from fiction in the e-commerce world. Virtually every company that has staked a claim in the MRO market describes itself as the leading B2B solution provider. Yet some of these companies have no relationships with distribution, or with buyers of MRO products.

So while I take the side of those who argue that e-commerce will change the shape of this channel, I also believe that its imperative for distributors to carefully choose their technology partners.

You dont want your B2B solution to hinge on b.s.