Editorial: Here's a reason to "just do it"
Wholesalers of various sizes can point to lots of reasons why not to jump on the e-commerce bandwagon: Electronic commerce is expensive to set up; the technology is always changing; contractor's aren't ready for it; manufacturers aren't ready for it; and the industry lacks standards for distributors to follow.
These reluctant wholesalers may find the "just do it" slogan of the ASA's Blue Ribbon Summit on e-commerce to be a little sketchy on providing reasons why they should get involved. The thinking of Summit participants is that wholesalers and manufacturers have talked for so long about the likes of EDI, electronic funds transfer and doing business on the Internet, it's time to actually do something.
While we agree with that notion, we also believe that wholesalers need a clear reason why they should make the considerable investment in e-commerce. The best reason we've heard is that if wholesalers don't, someone else will.
The National Association of Wholesaler-Distributors and Arthur Andersen drive home that point in their most recent "Facing the Forces of Change" report. They believe that wholesalers must gain experience with the Internet and other forms of e-commerce now "before others with more experience can present a compelling technology-based value proposition to their customers and suppliers."
Far from sounding like a death knell for distributors, electronic technology provides many opportunities for wholesalers to perform their traditional functions more efficiently than they do today.
Wholesalers can continue to believe that e-commerce won't become the norm in our industry any time soon, but the numbers don't support that view. U.S. business-to-business sales last year over the Internet exceeded $17 billion; by 2002, they're expected to reach $327 billion.
And the Internet is just one form of e-commerce. ASA's Blue Ribbon Summit of wholesalers, manufacturers and software vendors focused more on the problems and potential of EDI. A new e-commerce report from NAW, due out this month, contends that while EDI-based continuous replenishment programs haven't lived up to their promise so far, they will soon deliver substantial cost efficiencies.
The reasons for wholesalers not to get involved with e-commerce are still the same they've always been. The primary motivation for wholesalers to get involved is to maintain -- and build -- their place in the distribution channel.