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14 may 2001, USA

Hi,

To make the story short, I have implemented what I consider to
be new new concepts at my ecommerce hosting portal
(www.123plaza.com), that basically:

a) Enables suppliers (wholesalers, distributors and
manufacturers) to link retailers directly to their inventory
databases (vertical associations),

b) Allows to establish associations between multiple
suppliers, similar to affiliates or associates programs
(horizontal associations).

c) Retailers in turn, can establish vertical and horizontal
associations

In my humble opinion, I consider this to be a true B2B2C implementation, since most ecommerce hosting software or systems, available in the market seem to be simple adaptations of retail shopping shopping cart systems.

These new features for lack of a better name, I have labelled
it "Internet Distribution Channel", or "Supply Chain
Integration".

So far, I have had little success attracting suppliers to this
ecommerce portal, and would like to hear your comments,
critiques, etc. wether destructive or not that will help me
entice these elusive suppliers (provided you consider these to
be viable concepts).

I am losing my hair on this one, since all my promotional
efforts, seem to indicate, that this industry group is quite
anachronistic with respect to Internet usage and technologies.

Only companies in the computer sector have jumped eagerly to
the new idea.

Or, is it that the concepts implemented are not such a good
idea after all?

TIA,

IB

Dear IB:

Two initial comments:

1. I've taken a quick look at your web site and it is well designed, easy to navigate and easy to understand - so this is clearly not the problem. I particularly like the option to create a test virtual store, that allows users to try out the system before signing on.

2. I cannot provide more than a few comments based on a quick look at your web site. If you want a more in-depth analysis, you will need to hire a consultant who can provide this.

Firstly, my own experience reflects yours: the most conservative group in adopting e-commerce is small to medium sized manufacturers - ie. your suppliers. For these companies, sales have often been relationship based and manufacturers have not been enthusiastic about e-commerce which they feel, rightly or wrongly, removes the relationship from the transaction. Moreover, many small manufacturers cannot compete with large manufacturers on price. So they offer added value in more intangible ways, such as more personalised service, greater willingness to customise orders, etc. Such companies may feel that in an on-line marketplace, their added value will get lost and they will be forced to compete on price - a competition they know they cannot win.

In addition, some manufacturers have given exclusive territorial rights to specific retailers. If so, they may not be able to sign on to your mall. Other manufacturers may be concerned that consumers coming to your site might somehow be able to access their web pages and attempt to buy from them directly.

My own inclination would be to break your business into two separate parts:

1. A retail mall
2. A wholesale mall

You will need to market each separately and will probably have to push the benefits of the wholesale mall more aggressively than the retail mall. And, if the wholesale mall can't be made to work, you might be best advised to wind it up and focus on the retail mall.

Good luck,

Dr. Ecommerce