Every industrial distributor knows eCommerce should be an important part of their business, but very few can actually get the boat out of the harbor, and even fewer can say that eCommerce sales account for a significant portion of their total revenue. In this episode of the Takeover, I share three reasons why distributors struggle to launch their online channel and what to do about it.
It's more than just a Matthew McConaughey romantic comedy, "Failure to Launch" or "Peter Pan Syndrome" is an epidemic plaguing young men who struggle to become productive, hard-working members of society. The disengagement (and failure) of this generation will have a profound impact on the future of our economy and families alike.
As much as that bothers me, I see an equally distributing lack of development in the area of industrial distribution and eCommerce technologies.
Many distributors have procrastinated on the issue of eCommerce while those who have invested in building a platform are woefully under-performing compared to other B2B distribution industries.
Why the failure to launch? Why the lack of performance?
I believe there are three main reasons why distributors are struggling in this area. Let's take a look at each weakness and what we can do to make it better.
1. Technology Paralysis by Analysis
Before we can talk about launching or growing an eCommerce website, I suppose it's important to know how to do it and which technology to use for your customers and employees. In my experience, it can be very difficult to discern the right choice because of so many options and varying opinions.
When you go the grocery store without a list, you may never come out. If you try to cook a meal for your family without a recipe, it may not turn out very good. It's a simple analogy, but my first suggestion for overcoming the technology confusion is to consult with a professional "chef", get a "recipe", and then go shopping.
You could also consult a non-competitive peer in the same industry. Not all recipes come from chefs, after all! Sometimes grandma's biscuit recipe is better than anything you can find in Emeril's cookbook.
When you go to market, remember that not all eCommerce platforms are created equal. Some seem like a good deal because they are inexpensive to start, but later you discover that adding content and designing the right experience is a money pit from hell. Other solutions seem to have everything "out of the box", but then you realize they cannot be customized, or they lock you into buying from a particular supplier, so you end up with something that looks exactly like your competitor's website. In a time when value proposition and specialization are the key to a thriving distribution business, this can actually do more harm than good.
The key here is to narrow the eCommerce options available so you can make this task more manageable. Trust the peers you respect. Find a trustworthy advisor who understands your business, to help you navigate this decision, and you will be well on your way to launch!
2. Project vs. Process
The second big problem I see that keeps distributors grounded is perfectionism. Traditional distributors see an eCommerce website like a project with a start and end-date. The problem with that of course is that a successful eCommerce website is never finished.
Even after you launch your new website the work is far from over. In fact, it could be argued that the hardest work of building a profitable eCommerce channel comes AFTER the successful launch. You will need to train your team, roll-out the new website with your existing customers, manage pricing, manage the catalog (or product content), and run ongoing marketing campaigns to nurture existing customers and attract new ones. It's a never-ending process. NOT a project.
We've had customers launch their site and get on to the important work of building their channel in as little as two months. On the other hand, distributors who are shackled by perfectionism feel the need to have 100% of the products they sell online before they go live with their new website. This might mean collecting and building manufacturer content for thousands of SKUs, which means hundreds of hours.
We always recommend that our customers launch their website as quickly as possible with a the absolute best sellers only. This way they can get to the growth strategies of onboarding customers and develop a rhythm for adding products, pricing, and marketing campaigns.
In our Industrial Marketing 101: eCommerce Master Class, we provide a free process that you can follow to help you build, launch, and grow your online channel based on years of doing this for other distributors. Click here to get access to that resource.
Remember, launching an eCommerce website is not like building a paper catalog. When you print a catalog, everything has to perfect before print because there is a definitive end date to the project and you will be potentially stuck with what you print for years. An eCommerce website is more like tending a garden. Yes, it's a lot of work to plant the garden, but if you do not consistently water it and pull weeds, you will not be able to show much fruit for your labor.
3. Lack of Leadership
I thought about omitting this last point because it stings so much, but I have to tell the truth. By far, the biggest reason why industrial distributors fail to launch and grow a successful online channel is the lack of leadership and commitment starting at the very top.
Let's say my team works with the owner of a typical small-to-medium sized industrial distributor to build a personalized product catalog and a great looking marketing website. Everyone is happy and high-fiving because now we have this amazing looking website and ordering tool for their customers.
Let me give you three real-life parables of what can happen next (which will absolutely determine the ROI of this endeavor).
Distributor Owner #1 - Failure to Delegate
"Karen" is committed to making the eCommerce channel a success, but because she's not willing to hire or outsource a team to manage the website and digital marketing, she struggles to add this massive undertaking to her already full plate which consists of overseeing accounting, purchasing, and sales.
Despite her good intentions and beautiful website, 6-months go by before anything has happened. She fails to roll it out to her customers because she is always putting out fires and is afraid that getting her customers online will just create another fire. She fails to run a consistent marketing campaign because she is too busy dealing with existing customers. This website is never going to produce the results she wants and instead it becomes and expensive line card. She needs to hire some help!
Distributor Owner #2 - Lack of Accountability
"Jack" is also committed to making the eCommerce channel a success. So much so, that he is willing to go the extra mile and hire someone to help him run the website. Unlike Karen, he knows this is way over his head and he doesn't have the time or experience to do it himself, so he hires "Marketing Manager Mindy" to help him.
Unfortunately, because Jack doesn't have the long view in mind, he never makes the website a core strategic initiative. He follows the money and the website isn't making any, so he considers it a "necessary evil" that he pays for so he can appear more competitive when bidding his customers. He needs to hold Mindy accountable to the success of this channel by setting SMART goals for traffic, leads, orders, and revenue. Until he does, the website will continue to underperform.
Distributor Owner #3 - Extreme Ownership
Jocko Willink, a Navy Seal, wrote the leadership book, Extreme Ownership: How U.S. Navy SEALs Lead and Win. In it, he writes the following.
“On any team, in any organization, all responsibility for success and failure rests with the leader. The leader must own everything in his or her world. There is no one else to blame. The leader must acknowledge mistakes and admit failures, take ownership of them, and develop a plan to win.”
The thing that stood out to me is the very last part, "develop a plan to win". That's exactly what Greg did, our third and final example. He hired the right marketing leader to delegate the website. He called this person his "digital branch manager" and he empowered her with all the resources she needed to hit their well-defined SMART goals. He checks-in with her on a weekly basis to review website analytics and marketing reports. On a quarterly basis, they meet with an industry expert who helps them review their online dashboard and define targets and goals for the next quarter. Greg talks about the website with his sales team, leadership team, and suppliers all the time. He studies trends, he reads articles (like this one), and he does not tolerate a lack of results.
The moral of this story?
Be like Greg.