An Ottawa company says it will launch a concerted effort next month to revolutionize the information technology industry by providing an e-commerce network linking resellers, distributors and vendors.
“This technology is what resellers need to compete with Dell,” said Bill Osborne,
president of The Business Network (TBN), a privately-held supply chain application service provider.
“Our goal is to be the Yellow Pages of any SKU in the industry.”
Starting at $7,500 a year, a reseller can have a Web-based application giving its sales staff access to tens of thousands of products and pricing from partner distributors, he said, including the latest promotions from participating vendors.
It’s ideal for resellers and distributors who can’t afford or haven’t invested in e-enabling their systems, said Osborne. TBN can also supply or connect to back-office systems.
Ideally, the system lets the buyer choose the best prices and buy online without having to phone, fax or e-mail for competitive bids. When a reseller searches for a product, the results show availability from all member distributors and the location of stock.
However, depends on the degree to which all sides are e-commerce equipped.
The system includes a shopping cart for completing transactions as well as modules for quotes, reporting, sales force and customer relationship management, some of which may cost extra.
TBN has been running quietly with about 130 resellers signed up already. Distributors currently on board include Tech Data Canada and Synnex Canada. Hewlett-Packard Canada is the one of the few manufacturers participating.
Osborne hopes to change that soon. Next month, he says, the company will start a nine-city road show to bring the number of resellers up to 300 by the end of the year.
“What we’re trying to do now is bring new credibility to the solution in which manufacturers can benefit,” he said.
“Our job in the next six months is to attempt to bring on in excess of 20 large distributors, so we’re cataloguing every manufacturer’s product in the industry,” he added.
Their participation, however, will cost $25,000, plus monthly fees between $750 and $2,500 for hosting their product catalogues.
For manufacturers, who are being asked to pay from $750 to $5,000 a month, TBN can influence the buying of resellers by using it to quickly spread word of promotions, said Osborne. Spiffs, bonuses and other incentives are listed with product information.
However, he cautioned distributors will have to make adjustsments. “They will have to create new efficiencies within their organizations, as well as create new value points in terms of loyalty programs,” Osborne said.
So why would a distributor join? “I’m damned if I do or damned if I don’t,” replied David Spindler, Tech Data Canada’s director of e-solutions. The distributor signed up because resellers want to be able to easily source from multiple distributors. TBN, he said, could be attractive to resellers.
“I’d rather be on the front of the train pushing it and being able to control my destiny rather than having to react because one of my competitors jumped on before me,” he added.
However, he believes many of his firm’s large customers will still deal directly with it, especially those selling tailored solutions. Five years from now only about one-third of the distributor’s business will go through TBN, he estimated.
Many resellers may fear TBN because it allows their customers to see online what distributors are charging, he said, and then beat them down on price. So the distributor isn’t abandoning its suite of e-commerce tools.
Similarly, TBN is just another part of HP Canada’s online channel strategy, said David Brisson, the company’s e-programs manager for the channel. It uses TBN as a hub for distributing HP Canada’s eChannel product promotion tools to member resellers.
TBN “has a very good chance of securing a lot of business,” he said, and the company is working to get all its Canadian distributors to join the network. “It creates extraordinary value for the reseller,” he said.
It’s also good for distributors, he added. “If a reseller gets an order for a product he’s never bought before, he can plug it into the sourcing module, and pull up all the distributors that sell it. It saves a lot of legwork.”
“It’s the most efficient way to have an e-store for my customers,” agreed Gary McNally, president of Digica Computers Inc., a reseller based in Caledon East, Ont.
TBN began building and selling online shopping carts, then changed to being a marketplace for printer supplies before developing the IT supply chain model. It hopes to adopt the model to other industries.