A Web Spun of Gold

Aug. 1, 2003
The electrical market is venturing onto the wispy edges of the Web where virtual stores are opening gilded doors.Will the sound of millions of mouse clicks

The electrical market is venturing onto the wispy edges of the Web where virtual stores are opening gilded doors.

Will the sound of millions of mouse clicks soon echo throughout the electrical business, as electrical distributors' customers drop products into online shopping carts?

Believers in online purchasing see long lines of customers at the checkouts and hear their cash registers ringing up new sales. While the early converts say buying products online offers existing and new customers 24 hours-a-day, seven-days-a-week instant access, so far few distributors in the electrical business are offering their customers online shopping options.

W.W. Grainger, Inc., Lincolnshire, Ill., is a notable exception, and the firm has spent millions of dollars on the online storefronts that it offers at www.grainger.com and at www.orderzone.com, a site it launched in May in partnership with distributors of medical, safety and electronics supplies (See "Grainger in the Zone" on page 36). Grainger has been selling electrical products and other facility maintenance supplies online for about two years (a lifetime in the Internet world).

Online sales won't rival sales purchased through traditional purchasing methods for some time, but distributors already active in the online game think online orders will account for an increasing percentage of their business in the months and years to come.

CLS, Inc., Hartford, Conn., has offered online purchasing for the past two years, and this year has seen online orders hit at least $200,000 every month. While this is a fraction of the company's $100 million-plus in annual sales, the sales are coming from existing and new customers in its primary New England market, as well as from around the U.S. Joe Cardin helped develop the CLS site before starting up his own company, Net Possibilities, Hartford, Conn., and launching the www.buildingsuppliesweb.com and www.electriciansweb.com Web sites.

He believes within two to three years CLS will do 30% of its business online. Cardin, Net Possibilities' chief Internet officer, says other distributors should be ready to do at least that much of their business online in the future, or face the possibility of other Web-based companies doing it for them. "If you don't think it will be 30%, there will be companies not even in this market space now that will do it over the Web and take that 30% of the business. Distributors will wonder where it all went."

Anyone following e-commerce over the Web knows how quickly the landscape changes. In the early going, online commerce in the electrical business falls into two categories: distributors offering online purchasing over their own Web sites and virtual communities similar to the model used by www.verticalnet.com.

Along with Grainger and CLS, other distributors already offering online purchasing include Graybar Electric Co., St. Louis, Mo., (www.graybarnet.com) and GE Supply, Inc., Shelton, Conn., (www.commerce.supply.ge.com/supplynet). A new niche player has emerged online, too. Billing itself as "The Internet Lighting Store," the five-year old www.elights.com sells a wide variety of residential and commercial lamps, lighting fixtures and ballasts, as well as vandalproof fixtures for the industrial market.

Vertical communities bring together buyers and sellers through online product auctions, trying to entice them to linger at the sites with features such as industry news, chat rooms, classified ads, and job opportunities.

VerticalNet, www.verticalnet.com, is perhaps the best-known developer of this type of online real estate. The Horsham, Pa.-based company has sites operating in several dozen industries-including two on the periphery of the electrical wholesaling industry: www.poweronline.com and www.electricalnet.com.

Two other vertical communities focusing on the electrical wholesaling industry are worth noting. At press time, details began to emerge on www.electricalweb.com, a soon-to-be launched site that will allow end users to make online requests for proposals (RFPs). Another auction-based site, www.buildingsuppliesweb.com, will be discussed on the next page.

If your company wants to start selling products over the Web, you are going to love what Electrical Wholesaling's editors have in store for you in the following articles. We will kick off our coverage of this new world by exploring Joe Cardin's thoughts on the virtual electrical worlds he is creating, buildingsuppliesweb.com, and electricansweb.com, and follow that article with a report on what you need to know to build an online store. You will also get a behind-the-scenes tour of King Wire's new online store, an update on Grainger's orderzone.com and an early heads-up on "XML," a new programming language that will revolutionize how information is converted into Webspeak. We hope you enjoy these articles and that they help you open the door to your own online storefront.