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E-BIZ BASICS

Feb. 1, 2003
I admit it. Like many of us, this time last year I dreamt of getting rich quick by investing in a high-flying dot-com. No profits? No problem. Using some

I admit it. Like many of us, this time last year I dreamt of getting rich quick by investing in a high-flying dot-com. No profits? No problem. Using some contorted logic that ran counter to everything any of us ever learned about what it takes to fuel a successful business, the P-word back then was "potential," not "profits."

How times have changed. In one short year, we found out that profits do matter, whether you run an electrical distributor or launch the latest Web marketplace.

I have a feeling that many of your customers knew that all along. While reading the survey returns from the magazine's first-ever ElectroForecast survey (page 38), the message came through loud and clear: While impressed with the potential of the Web, most of the electrical contractors who responded to the survey are underwhelmed with the first-generation efforts of the online purchasing sites focusing on the electrical market.

From what Electrical Wholesaling's editors learned from the survey, electrical contractors use e-mail and love the Web for the 24/7 access it offers to cut sheets, catalogs and other technical data they need to develop estimates or troubleshoot electrical systems. But they have been very hesitant to move much of their purchasing onto the Web.

One New Mexico electrical contractor said her company's suppliers have Web sites and ordering, but that she prefers the personal sales rep, "a person we can talk to and hold responsible for service and products."

An electrical contractor from Tennessee probably reflected the opinions of many with what he expects from distributors. He is more concerned with the service that he gets from electrical distributors than with the tools that they need to provide this service.

"No matter what happens with technology, we still rely on service and competitive prices. We delegate a responsibility to suppliers and trust they will get the right material on site at the right time for the right price. How they accomplish this is up to them."

The general thinking now seems to be that online purchasing will evolve into an option that distributors, manufacturers and other sources of electrical supplies will offer interested customers, but that it will never dominate the electrical scene the way its most devout supporters expected just one short year ago.

It has been fascinating to watch the fitful evolution of online purchasing in the electrical business and in the overall business world. Some of the best and brightest minds in the electrical industry invested millions to develop online ordering systems over the past few years. But no one seems to be happy with the amount of orders they now get online, and many, including well-known companies like Grainger, Thomas & Betts and Rockwell Automation, are rethinking their first efforts in the online arena.

Many of the problems they run into are technical. It just isn't that easy to build and maintain a database loaded with thousands of products with always-evolving price points, and to have companies with different computer systems receive, read and use this information in a way that's faster and easier than traditional ordering methods. Until buying a product online becomes as easy as sending an e-mail, it won't be accepted by the masses.

Other problems are cultural. As a whole, the electrical industry is slow to accept change. Many Web wizards discounted the impact of the "if it ain't broke, don't fix it" factor. They blundered by attempting to reinvent an ordering process that, for most of your customers, worked just fine.

At this stage of the game, electrical distributors should listen to their customers on how they want to use the Web instead of trying to force-feed customers online purchasing systems that they don't want.

Before venturing into the online purchasing arena, focus first on developing a Web site loaded with the cut sheets and other technical data that offer your customers solutions to their immediate needs. Online purchasing will come in time. But it's more important to cover the basics first.

About the Author

Jim Lucy | Editor-in-Chief of Electrical Wholesaling and Electrical Marketing

Jim Lucy has been wandering through the electrical market for more than 40 years, most of the time as an editor for Electrical Wholesaling and Electrical Marketing newsletter, and as a contributing writer for EC&M magazine During that time he and the editorial team for the publications have won numerous national awards for their coverage of the electrical business. He showed an early interest in electricity, when as a youth he had an idea for a hot dog cooker. Unfortunately, the first crude prototype malfunctioned and the arc nearly blew him out of his parents' basement.

Before becoming an editor for Electrical Wholesaling  and Electrical Marketing, he earned a BA degree in journalism and a MA in communications from Glassboro State College, Glassboro, NJ., which is formerly best known as the site of the 1967 summit meeting between President Lyndon Johnson and Russian Premier Aleksei Nikolayevich Kosygin, and now best known as the New Jersey state college that changed its name in 1992 to Rowan University because of a generous $100 million donation by N.J. zillionaire industrialist Henry Rowan. Jim is a Brooklyn-born Jersey Guy happily transplanted with his wife and three sons in the fertile plains of Kansas for the past 30 years. 

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