The impact of electronic commerce and the Internet on the plumbing industry was the subject of an IT forum conducted by the Plumbing Manufacturers Institute Aug. 17 in Rosemont, Ill. Speakers addressed e-commerce and the wholesaler community, the dot-com phenomenon, and why marketplaces meet the needs of manufacturers.

"The global focus on e-commerce has to do with the cost side of the equation," said David Berman, president and CEO of and president of RAL Supply Group, during his presentation on incremental sales opportunities on the Web. "It does not focus on near-term marketshare, incremental sales or brand building."

A company's e-commerce goals, added Berman, should include creating a new channel through incremental sales and brand building; supporting the existing channel, conducting market research, establishing an Internet linking policy and creating an Internet strategy.

He cited five types of Internet players in the industry:

  • Wholesalers: Brick-and-mortar wholesale distributors that are establishing a presence on the Web and attempting to create efficiencies with their trading partners.

  • Wholetailers: Berman defines this group as wholesalers acting as retailers on the Internet - they'll sell product to contractors and consumers alike.

  • E-tailers: Home centers on the Web that offer little or no customer service or product expertise. Many are out of business today.

  • Retailers: The Home Depot and Lowe's are planning strategies to sell on the Web.

  • Content sites: These sites provide good information, as well as project and design management tools.

However, Berman noted that many of these sites don't "close the sales loop" -- keeping the user on the site and making a sale. If a customer cannot get his question answered in a timely fashion, he will go to another site to buy product.

Specialty e-tailers address this problem, Berman said. Full-time, product-trained, customer-service staffs that are able to answer customer questions precisely and close the sale support such sites. Orders placed through these sites usually are sourced through distribution, thus avoiding channel conflict.