Supporting the Supply Chain

“The most important thing you can do is to design the experience for your customers,” he says. “So if you’re creating an e-commerce site where people have had a more traditional purchasing process, we might go into the marketplace and watch how people purchase today. If that’s in a store, we’ll observe how customers come in, what they interact with, and what they look for first. If it’s in a business, we might find that the purchasing process is done with an Excel spreadsheet, and when they run low on a particular product or supply, a flag pops up to notify them.” The way in which your customers purchase from you on line should parallel the customer’s current purchasing methodology.

Ziegler recommends starting small, perhaps with a line of products that are only available on line. “That’s one way to get the distribution channel to buy into the idea,” he says. And it’s a way for manufacturers to learn the intricacies of selling on line before investing in a large-scale Web application. “The pitfalls are different for each manufacturer. For some, it might be supply, for others it might be returns, or inventory control,” Ziegler says. If a company selling a product on line doesn’t have the ability to keep up with demand or handle returns, customers will start doing their business elsewhere.

Online marketplaces such as eBay, Amazon, and Yahoo! offer a range of e-commerce solutions for businesses. For a monthly subscription fee, which varies depending on the number of products you want to sell and several other factors, companies customize their own virtual storefronts and obtain full e-commerce functionality. Many manufacturers have capitalized on these ready-made Web sites to sell their returned or refurbished products, which typically aren’t sold through traditional retail or distribution vehicles.

“It gives you access to a tested and robust system for selling products on line—it’s an ideal way to stick your toe in the water,” Ziegler says of the ready-made Web sites. “Through that mechanism, you can start building some valuable experience. Then, if you decide you want to amp up your efforts and go out on your own, you’ll at least have a good sense of how it works and what the challenges are.”

3M’s Dierberger, who manages several of the company’s product categories, including 3M Pet Care and Scientific Anglers, says your Web site can serve as something of a sandbox for new products before you formally launch them. For example, in March the company introduced its new 3M Pet Care Liquid Bandage, a spray-on bandage for scrapes and abrasions, for which the firm has yet to establish solid brick-and-mortar distribution.

“I think that’s an opportunity to sell on line,” Dierberger says. He explains that by selling the liquid bandage on line first, 3M can build consumer awareness for the product and generate a demand worthy of retailer shelf space. “But when we sell it on line—and this is important—we sell it at suggested list price, plus shipping and handling. That way, we don’t create a disconnect with our current distribution system or future distribution system,” he says.

Another of Dierberger’s product lines, 3M Golf, a Web site featuring 3M Greptile gripping material for golf gloves, mixes online sales with its traditional sales network. Accompanying each product’s information on the Web site is a “Where to Buy” button, which takes shoppers to a list of both online sales outlets and retail sites.