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How to Optimize your Online Business Collaborations

Copyright ? 2006

As a manufacturer, importer or distributor, you are facing

today's difficult business challenge in how to compete and

succeed in the Internet economy. Your traditional channels

of sales and distribution are being or should be recast to

take advantage of the Internet and this implies new ways of

utilizing your reseller or channel assets.

While you and many other companies feel the pressure to

sidestep competitors with a first-to-market advantage,

there is little benefit in aimlessly building and

implementing e-commerce systems. Many companies are taking

a haphazard approach to the Internet, trying to shoehorn

existing business practices into simplistic e-commerce

capabilities or worse, drastically changing current

effective business practices.

A more sensible approach is to determine how to use the

Internet to optimize and extend your company's established

sales methods and align your e-commerce strategy with your

company's overall goals. The question is not whether you

should utilize Internet sales channels, but how can you do

so in a profitable way without alienating your existing

distributors, resellers, dealers and clients.

But where do you start and what are the essential elements

of a collaborative commerce solution? Before embarking on

an e-commerce strategy you need to ask yourself a few

important questions on how you will relate your business

needs with those of your reseller partners.

The Gartner Group estimates that over 90% of manufacturers,

importers or distributors do not sell their primary

branded products online. Why? The primary reason is channel

conflict; fear of the consequences of going into business

against your own selling partners.

Therefore, typically many manufacturers or primary

distributors establish a website that simply helps

customers gather product information and build a shopping

list, which they can then take to the nearest physical

store. Ultimately, your website does not close the sale and

has no visibility into whether these customers actually

purchased your products from your reseller.

Not only do you give up the rights to a new revenue stream,

but you also lose control over, and insight into, the

commerce activities within your own customer base.

But, what if you could provide customers with a unified and

guided selling experience across your sales channels by

presenting a seamless selling experience to your customers

and site visitors while integrating the value-add of your

reseller network? Your customers could access real-time

product information including pricing and availability

through resellers directly from your web site and their

respective web sites.

And what if your e-commerce system could ensure that

products were properly configured and orders routed to the

appropriate sales partner? This way you would remain

intimately involved in the e-commerce activities of your

resellers, while maintaining influence over the sales

process and customer experience.

You must determine which of your sales channels to take to

the web. You may presently utilize multiple channels to

respond effectively to your customers' needs such as your

direct sales teams plus a mix of resellers, retailers,

OEMs, and dealers who deliver value to your customers and

strategic value to you by providing you with global and

vertical reach, logistics and additional value-added

services.

It will be necessary to formulate an integrated strategy

that provides a common infrastructure for all of these

sales channels that you take to the web and then provide an

e-commerce infrastructure that integrates all of them

within a single cohesive system.

This online collaboration will allow your active

participation in all aspects of your customer's sales and

marketing experience, from shopping and product

configuration to fulfillment and feedback. Short-term

rewards include reduced costs through process automation

and efficiencies. Long-term rewards include increased

revenue, greater customer and partner loyalty, and the

ability to create strong sell-side partnerships that help

differentiate products.

Your resellers want to work with you, yet an Internet

business strategy that does not consider all your relevant

sales channels, including their sales and distribution

models and related business processes is a recipe for

failure.