Dealer systems are go
Unless you have spent the last few years living in a cave, you won’t need reminding that people don’t buy office products the way they used to. Purchasing practices have changed radically since the arrival of broadband. Traditional ordering methods – telephone, fax, even email – are slowly being sidelined. An estimated 60 percent of end users prefer to buy office supplies just like they book air tickets: with the click of a mouse.
On the face of it, independent dealers have risen to the challenge, as they always do. The overwhelming majority of dealers have some kind of front-end system that enables their customers to buy over the internet, and latest surveys suggest that on average around 25 percent of dealer volume is transacted online.
But let's focus on this for a moment. If 60 percent of end users want to buy online, why is it that only 25 percent of dealer sales are online? Clearly there’s a gap between what customers want and what dealers are providing, and the result is that dealers are losing out. And the big boxes, having invested millions of dollars in sophisticated eCommerce storefronts, are all too happy to pick up the business.
Of course, as an independent dealer, you know all this. But what are you actually doing about it? The way to win this business back is to take a good look at your eCommerce offering, and ensure it is fully competitive with the power channel. For as little as a few hundred dollars a month, you can have an internet ordering system that does everything you need, and improve your back-end capability at the same time.
The potential benefits are clear. An improved electronic storefront offers the prospect of higher sales, bigger margins and better vertical penetration of customer accounts. For speed, accuracy and efficiency, there’s really no alternative to internet sales – not to mention the point that it’s the way most customers say they want to buy.
The advantages of a better back-end solution are also plain for all to see, enabling you to squeeze every last drop of excess cost from the supply chain, and to automate the entire back-end process so that you can spend less time on administration and more time on signing up new customers.
This supplement is designed to help you identify the technology solution that’s best for your business. And that’s no easy decision. The number of software companies offering dealer systems has grown sharply in the past couple of years, and there are literally hundreds of system permutations on offer in a crowded and complex arena. Our aim is to remove the mystery from dealer systems and to match your needs to what’s available on the market.
The more sophisticated systems offer integrated front-end and back-end solutions, starting with a state-of-the-art electronic storefront, customized for each dealer, and capable in turn of being customized by the dealer for specific accounts. A customer buying an item online triggers a series of automated processes, beginning with the item being ordered from the wholesaler through to routing and proof of delivery, with full financial reporting.
Valuable features include Customer Relationship Management (CRM) to ensure that dealers are maximising the potential of each customer and selling vertically into related product sectors where possible. Other back-end value-adds include sales intelligence software to help translate past sales data into future revenue gains, and eMarketing capabilities to drive business forward.
You have to make certain that the system you select meets all your requirements now, and is capable of expanding in the future. But you tend to get what you pay for, and you certainly won’t want to pay for features you don’t need. Like buying a used car, why would you opt for a soft top in Alaska or a gasoline-thirsty V8 for the school run?
There are other issues. Is it better to have separate front-end and back-end systems, from separate providers playing to their own strengths, or one system that is seamlessly integrated? Is it advisable to select a small provider with what appears to be a better product, or would it be safer to go with a long-established big name? After all, this isn’t a decision to be taken lightly. Choosing a systems provider is like entering into a strategic partnership. It can be pivotal to the future of your business.
And how much should you be paying? You can get a basic front-end system for less than $100 a month, or a sophisticated integrated system offering the full works for $1,500 a month. Whatever your budget, the likelihood is that your system will pay for itself many times over in terms of the additional profit that it generates. It could be one of the best business investments you ever make – if you make the right choice.
Case study – MyOfficeProducts
If you build a company from nothing to $80 million within five years, you’re worth listening to – so listen to Bob Rolfe, chairman and CEO of MyOfficeProducts. “Our strategy was clear from the start,” he says. “No stock, no warehouse, just the smartest people and the best technology. That’s what we wanted, that�s what we went out and got, and it’s the reason we�re where we are today.”
The recipe was simple and it’s worked. MyOfficeProducts, based in Nashville, is one of the most successful stockless dealers in the south, with 90 sales reps and a customer base spread across 15 states in the South East, North East and West. Thalerus, its front-end technology provider, has built an internet ordering site that’s attractive and simple to use – so it’s no surprise that more than 60 percent of the company’s orders come in over the web.
But it’s not just the storefront that delivers value to Bob Rolfe. It is the ability of the system to analyse the customer base and extract the maximum from each account. “There are some terrific features in it. It’s very strong on sales intelligence. You can call up a customer account and slice and dice the information any way you want, providing you with plenty of cross-selling opportunities.”
Bolted onto the Thalerus front end is an MS Great Plains back-end system. Wouldn’t it be better to have one seamlessly integrated system? This would be ideal, Bob accepts, but as a stockless dealer, the integration issue isn’t critical. Integration matters most for dealers with stock because of the need to interface with inventory management, he argues.
Looking back, there’s just one thing he would have done differently with technology. “We’re a fast-growing company. If we did it all again, we’d stay with Thalerus but we’d buy it under license, hire some programmers, and expand the system ourselves instead of waiting for the provider. That way, we’d never outgrow it, not even for a day.”
Case study – AAA Business Supplies and Interiors
Steve Danziger has been selling office products in the San Francisco Bay area for more than a quarter of a century, and despite everything the power channel has tried to throw at him, business is booming. His company, AAA Business Supplies and Interiors, is currently producing sales of $15 million a year. Not bad for a traditional stocking dealer – so what’s the secret?
The answer is technology, Steve explains. “We have always taken a strategic view of technology. It�s the reason we have been able to remain competitive, run the business efficiently, and continue providing great customer service.”
From a warehouse on the outskirts of the city, AAA Business Supplies and Interiors delivers to more than 1,000 mid-market commercial customers, using SP Richards as its first-call wholesaler. Most customers are in the San Francisco Bay area, although the company also offers next-day delivery nationwide.
Steve’s technology provider is ECI². The dealership runs DDMS in the back office, and Dealer Station at the front end. As a stocking dealer, inventory management is a critically important issue, and this is where DDMS functionality scores particularly strongly, he says.
“For example, the system issues a low-stock report when the warehouse is running short of something, so we only re-order when we need to, and that keeps our capital outlay to a minimum. But it also takes everything from prepaid shipment thresholds to lead times and even seasonality into account, which ensures that we stock as efficiently as possible.”
The relationship between dealers and technology providers should be two-way, he believes. “If you’re a dealer and you truly want your system to work well, you have to put in time as well as money. Take advantage of all the training. Go to the user meetings. Master the technology, rather than have the technology master you.”
Unless you have spent the last few years living in a cave, you won’t need reminding that people don’t buy office products the way they used to. Purchasing practices have changed radically since the arrival of broadband. Traditional ordering methods – telephone, fax, even email – are slowly being sidelined. An estimated 60 percent of end users prefer to buy office supplies just like they book air tickets: with the click of a mouse.
On the face of it, independent dealers have risen to the challenge, as they always do. The overwhelming majority of dealers have some kind of front-end system that enables their customers to buy over the internet, and latest surveys suggest that on average around 25 percent of dealer volume is transacted online.
But let's focus on this for a moment. If 60 percent of end users want to buy online, why is it that only 25 percent of dealer sales are online? Clearly there’s a gap between what customers want and what dealers are providing, and the result is that dealers are losing out. And the big boxes, having invested millions of dollars in sophisticated eCommerce storefronts, are all too happy to pick up the business.
Of course, as an independent dealer, you know all this. But what are you actually doing about it? The way to win this business back is to take a good look at your eCommerce offering, and ensure it is fully competitive with the power channel. For as little as a few hundred dollars a month, you can have an internet ordering system that does everything you need, and improve your back-end capability at the same time.
The potential benefits are clear. An improved electronic storefront offers the prospect of higher sales, bigger margins and better vertical penetration of customer accounts. For speed, accuracy and efficiency, there’s really no alternative to internet sales – not to mention the point that it’s the way most customers say they want to buy.
The advantages of a better back-end solution are also plain for all to see, enabling you to squeeze every last drop of excess cost from the supply chain, and to automate the entire back-end process so that you can spend less time on administration and more time on signing up new customers.
This supplement is designed to help you identify the technology solution that’s best for your business. And that’s no easy decision. The number of software companies offering dealer systems has grown sharply in the past couple of years, and there are literally hundreds of system permutations on offer in a crowded and complex arena. Our aim is to remove the mystery from dealer systems and to match your needs to what’s available on the market.
The more sophisticated systems offer integrated front-end and back-end solutions, starting with a state-of-the-art electronic storefront, customized for each dealer, and capable in turn of being customized by the dealer for specific accounts. A customer buying an item online triggers a series of automated processes, beginning with the item being ordered from the wholesaler through to routing and proof of delivery, with full financial reporting.
Valuable features include Customer Relationship Management (CRM) to ensure that dealers are maximising the potential of each customer and selling vertically into related product sectors where possible. Other back-end value-adds include sales intelligence software to help translate past sales data into future revenue gains, and eMarketing capabilities to drive business forward.
You have to make certain that the system you select meets all your requirements now, and is capable of expanding in the future. But you tend to get what you pay for, and you certainly won’t want to pay for features you don’t need. Like buying a used car, why would you opt for a soft top in Alaska or a gasoline-thirsty V8 for the school run?
There are other issues. Is it better to have separate front-end and back-end systems, from separate providers playing to their own strengths, or one system that is seamlessly integrated? Is it advisable to select a small provider with what appears to be a better product, or would it be safer to go with a long-established big name? After all, this isn’t a decision to be taken lightly. Choosing a systems provider is like entering into a strategic partnership. It can be pivotal to the future of your business.
And how much should you be paying? You can get a basic front-end system for less than $100 a month, or a sophisticated integrated system offering the full works for $1,500 a month. Whatever your budget, the likelihood is that your system will pay for itself many times over in terms of the additional profit that it generates. It could be one of the best business investments you ever make – if you make the right choice.
Case study – MyOfficeProducts
If you build a company from nothing to $80 million within five years, you’re worth listening to – so listen to Bob Rolfe, chairman and CEO of MyOfficeProducts. “Our strategy was clear from the start,” he says. “No stock, no warehouse, just the smartest people and the best technology. That’s what we wanted, that�s what we went out and got, and it’s the reason we�re where we are today.”
The recipe was simple and it’s worked. MyOfficeProducts, based in Nashville, is one of the most successful stockless dealers in the south, with 90 sales reps and a customer base spread across 15 states in the South East, North East and West. Thalerus, its front-end technology provider, has built an internet ordering site that’s attractive and simple to use – so it’s no surprise that more than 60 percent of the company’s orders come in over the web.
But it’s not just the storefront that delivers value to Bob Rolfe. It is the ability of the system to analyse the customer base and extract the maximum from each account. “There are some terrific features in it. It’s very strong on sales intelligence. You can call up a customer account and slice and dice the information any way you want, providing you with plenty of cross-selling opportunities.”
Bolted onto the Thalerus front end is an MS Great Plains back-end system. Wouldn’t it be better to have one seamlessly integrated system? This would be ideal, Bob accepts, but as a stockless dealer, the integration issue isn’t critical. Integration matters most for dealers with stock because of the need to interface with inventory management, he argues.
Looking back, there’s just one thing he would have done differently with technology. “We’re a fast-growing company. If we did it all again, we’d stay with Thalerus but we’d buy it under license, hire some programmers, and expand the system ourselves instead of waiting for the provider. That way, we’d never outgrow it, not even for a day.”
Case study – AAA Business Supplies and Interiors
Steve Danziger has been selling office products in the San Francisco Bay area for more than a quarter of a century, and despite everything the power channel has tried to throw at him, business is booming. His company, AAA Business Supplies and Interiors, is currently producing sales of $15 million a year. Not bad for a traditional stocking dealer – so what’s the secret?
The answer is technology, Steve explains. “We have always taken a strategic view of technology. It�s the reason we have been able to remain competitive, run the business efficiently, and continue providing great customer service.”
From a warehouse on the outskirts of the city, AAA Business Supplies and Interiors delivers to more than 1,000 mid-market commercial customers, using SP Richards as its first-call wholesaler. Most customers are in the San Francisco Bay area, although the company also offers next-day delivery nationwide.
Steve’s technology provider is ECI². The dealership runs DDMS in the back office, and Dealer Station at the front end. As a stocking dealer, inventory management is a critically important issue, and this is where DDMS functionality scores particularly strongly, he says.
“For example, the system issues a low-stock report when the warehouse is running short of something, so we only re-order when we need to, and that keeps our capital outlay to a minimum. But it also takes everything from prepaid shipment thresholds to lead times and even seasonality into account, which ensures that we stock as efficiently as possible.”
The relationship between dealers and technology providers should be two-way, he believes. “If you’re a dealer and you truly want your system to work well, you have to put in time as well as money. Take advantage of all the training. Go to the user meetings. Master the technology, rather than have the technology master you.”
