WebStack's Blog focuses on the use of syndicated e-commerce networks as sales channels: Vertical networks (manufacturers, distributors, and dealers) and horizontal networks (malls, service plazas, and subcontractor teams). We will discuss the why's, how's and when's.
So, I've started this blog and now it seems I need to find things to say. Ok, how about, "who are the businesses that would make good candidates for such a model?" It turns out that there are those that sponsor a syndicated network an those that subscribe to such a network.
The service sponsors are those that have a business affiliation with a significant number of other businesses, usually smaller than the sponsors. These smaller businesses are typically distributors, dealers, or agents that belong to the sales channel of the sponsor (you might imagine a lawnmower manufacturer (1) with regional distributors (10) and local dealers (3000) in most cities and towns across America).
In the typical situation, the manufacturer has a marketing department and an information technology department. And, the manufacturer has a nice, fancy website that is maintained by an internal web team or their advertising agency of record. There is strong temptation/incentives to enable the manufacturer's website to sell their lawnmowers online. And by cutting out the middle man, the lawnmowers can be sold more competitively. Good for them - right? Not so much!
Then, at the end of the sales channel, there are the dealers. These dealers are typically small businesses with no, or small, marketing staffs. They have no information technology in-house - maybe a part-time consultant that keeps their computers running. So they resort to Internet website solutions that are designed and administered locally without the content expertise (lawnmowers) and digital assets (marketing copy and images) of the manufacturer. In fact, the dealers' lack of Internet marketing skills is one of the manufacturer's primary concern with the dealers' online presence.
Here is the problem:
1. The dealers' independently created websites put the manufacturer's brand at risk if the lawnmower images are distorted or out of date or the copy makes extravagant claims about cost, performance or warranty. There is no continuity to the marketing message.
2. On the other hand, the dealers resent the manufacturer going after their customers online with lower prices than they can sell the lawnmowers in their local retail shop. They are, after all, the business with the customers and they like to sell lawnmowers as well as service them.
And, here is the solution:
As in most industries, the sales channel members depend upon the manufacturer to set the marketing message and enable the advertising through photography and other media. Then they co-op the cost with the distributors and the dealers - think "billboards". It turns out that the same model holds together very well with the Internet by using syndicated e-commerce.
With a syndicated e-commerce network, the manufacturer provides their expertise in online marketing, information technology and product content to build a conceptual website model for their sales channel partners. From this model, custom stores can be co-branded for every distributor and dealer in the channel. The manufacturer's catalog can be centrally maintained. The cost can be shared through the manufacturer's co-op program and the overall cost greatly reduced while the manufacturer's products online presence is spread across the nation through 3000 localized web sites.
The manufacturers keep their dealers happy, and the dealers keep their customers happy!
The next blog: in-house or outsource
There is special form of e-commerce networks that I classify as syndicated e-commerce. Actually, it as more of a model for deploying e-commerce than an actual network itself, as you will see.
First of all, a syndicated e-commerce network requires a sponsoring agency. This agency can be a manufacturer, a distributor, a professional asociation, or any group of affiliates that share a common commercial purpose. And, the sponsoring agency must have a significant number of affiliates (members, sales partners, agents, etc.) who share a common set of e-commerce objectives.
A sponsor takes the lead in providing the online marketing expertise and developing the requirements for the e-commerce enterprise. The purpose of the syndicated approach to e-commerce is to share the reduced cost benefits with the affiliates, such as:
The fundamental idea behind syndicated e-commerce is that a sponsor can work with a web developer to enable its partner/members enjoy a professional online presence and its commercial benefits for greatly reduced costs without having to hire and manage the expertise themselves.
I have been working with this type of online syndication for a number of years and have been lucky to have worked with excellent sponsors. I will try to share what I have learned about syndicated e-commerce as I see what level of interest and questions the subject generates.
Please feel free to jump in with your comments an ideas. You can reach me at email@example.com