Four and a half years ago Miller Electric Construction, a manufacturer of welding equipment, made its first foray onto the Web with a site that many might call a "cyberbrochure." Millerwelds.com was primarily used to provide information to customers and distributors; customers could not place orders or find distributors back in those days.
But executives at the 1,200-employee company were keenly aware that the Web had a greater potential than merely serving as a portal for information.
"The company decided it wanted to sell online, so it put out a survey to customers on the Web site," says Tim DeMars, Miller Electric's executive vice president in charge of brand and distribution.
The survey of visitors to the site revealed that about 28 percent had purchased other sorts of tools online. From the survey, Miller executives estimated that 25 percent to 40 percent of the company's industrial accounts were using the Internet.
But customer interest in buying online presented another challenge to the 72-year-old company, which had built its empire by selling through a single channel: In the welding industry, distributors provide the local service and support that a large manufacturer can't.
"One hundred percent of our business is distributors," DeMars says. "For welding, where you have a solution-oriented process, selling direct doesn't work. Customers may want all sorts of custom embellishments to a product. Distributors provide value."
But Miller's distributors were slow to commit to the Web. "The Internet scared the daylights out of them," DeMars says. "They knew they should be there, but they weren't quite ready for it yet."
Miller needed a solution that could expand its Internet presence while including its distributor network. In 18 business sessions across the country, executives spent time talking to distributors about selling online. "We wanted to find a way to partner with our distributors," DeMars says.
Through these conversations, Miller executives learned that distributors wanted to retain control over pricing and closing the sale. But distributors had something powerful to gain through partnering with Miller in the e-commerce initiative. Welding customers were more likely to hit the Miller Web site than they were a distributor site when they were looking to buy, because Miller has a strong brand name. If the Miller site could point customers to their local distributors, those distributors would only stand to gain sales dollars.
Miller's Web site design group, Digital Magic Inc. (DMI), recommended InfoNow's iCommerce, an MSP (managed service provider), to help it launch an e-commerce program. The entire project -- establishing business rules, designing a user interface, creating interfaces between the Millerwelds.com site and the InfoNow-hosted distributor sites, and other details -- took nearly three months to implement.
Miller rolled out the pilot program in January to 15 distributors encompassing 440 locations. InfoNow's solution created co-branded Web sites for each of these initial distributors. Distributors chose the items they wanted to carry from the Miller master catalog and set up their Web sites through a wizard-driven process that took only about an hour and a half. They were able to set their own prices, specials, and ancillary product packaging deals. The InfoNow-hosted sites also included merchant accounts, which completed transactions and accepted payments in the form of credit cards or purchase orders.
To participate, distributors pay a one-time setup fee, a monthly fee, and a 3 percent transaction fee. In addition, distributors with multiple locations pay another $100 per location on top of the regular setup fee.
Visitors to Millerwelds.com choose the product they want to buy. After clicking the yellow Buy Now button, the site prompts the customer for his or her address. The system then locates the three distributors nearest to the customer's address. Once the customer selects a distributor, the shopping basket is moved to the distributor's site.
"What the distributors don't realise is that if they are going to have a Web site, somebody has to tell everyone about it," DeMars says. "Miller has 73 percent market penetration."
Early indicators are promising. For example, at the beginning of the pilot in January, one participating distributor had about 80 exposures per month for a particular product. In March that same distributor had more than 3,200 exposures.
DeMars took information about the early successes of the pilot with him to a recent welding convention to sell the idea to some of the company's other distributors.
"We are excited about this," DeMars says. "We've been very frank with our distributors by telling them that we can't promise them any kind of sales, but based on the early results I can't see anywhere to go but up."