Crafting a strong business case for e-commerce: What you need to know

Updated Jul 20, 2023
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In today's digital age, e-commerce has become an essential tool for businesses across industries. For distributors, implementing e-commerce presents a multitude of benefits.

This blog post aims to guide you on how to write a persuasive business case for integrating e-commerce into your operations. Specifically, we will explore how digital self-service tools, such as e-commerce platforms, can significantly reduce administrative burdens and drive business growth.

Reducing Administrative Tasks:

One of the primary advantages of implementing e-commerce for distributors lies in the substantial reduction of administrative tasks for various teams. If you were to take a close look at the percentage of time your customer-facing teams are spending on administrative activities, you will likely find it is anywhere from 40% to 60% of their daily activity. Let's examine the primary areas where these benefits manifest in an equipment and parts business: 

  1. Customer Service: By offering a digital self-service platform, distributors empower end-users to find product information, track orders, and access support resources independently. This streamlined approach reduces the volume of routine inquiries and frees up customer service teams to focus on more complex issues and proactive customer engagement.
  2. Technical Service: e-commerce platforms can provide comprehensive product documentation, troubleshooting guides, and self-help resources. By enabling customers to resolve technical issues independently, there’s a reduced strain on technical service teams, leading to improved response times for critical cases.
  3. Sales Teams: With e-commerce, sales representatives can spend less time processing manual orders, answering calls or text messages for price and availability, or fielding questions regarding when an order will ship. They will spend more time engaging in value-added activities like building customer relationships and driving revenue growth. Automated order management and self-service capabilities empower end-users to place orders directly, reducing the administrative burden on sales teams. 

[RELATED: Moving away from an order-taking culture: Strategies for distributors and aftersales leaders]

Business Growth Opportunities:

While the administrative benefits of e-commerce are compelling, the true power of this digital transformation lies in its ability to drive business growth. Let's explore how e-commerce can unlock growth opportunities:

  1. Product Recommendations and Upselling: e-commerce platforms equipped with recommendations can help organizations analyze customer behavior, purchase history, and preferences to provide product suggestions (like kits and product upgrades). By leveraging upsell and cross-sell functionality, distributors can increase average order value and revenue per customer. In traditional environments where call and email volumes are high, it is very challenging to be proactive in this manner for every opportunity and customer.
  2. Optimized Pricing Strategies: e-commerce platforms allow distributors to implement consistent pricing strategies, offering personalized discounts, tiered pricing, or promotional campaigns. These pricing capabilities, coupled with data-driven insights, enable businesses to maximize margins and increase revenue.
  3. Improved Inventory Forecasting: By implementing e-commerce enabled with a good analytics engine, you can analyze search trends to determine what customers are searching for but not ordering. If these orders are lost due to no product availability, planners can make adjustments to forecasted demand to ensure the right inventory is on the shelf. In the aftermarket, it is commonly known that inventory is often more important than price when equipment is urgently required to get back to work.
  4. Enhanced Customer Satisfaction and Loyalty: A well-designed e-commerce platform offers convenience, self-service capabilities, and a seamless purchasing experience, leading to increased customer satisfaction. Satisfied customers are more likely to become loyal, repeat buyers, fostering long-term relationships and generating sustainable revenue streams. A better aftermarket customer experience translates into purchasing your whole goods again in the future. The annuity from a great customer experience cannot be understated.

Building the Business Case:

When constructing a business case for implementing e-commerce in a distribution business, it is crucial to highlight the quantifiable benefits and tie them back to the organization's strategic goals. Consider the following points:

[RELATED: Improving your customers' parts purchase experience]

  1. Cost Savings: How much time is your customer service and sales team spending on administrative tasks today? Calculate the potential time and cost savings resulting from reduced administrative tasks across customer service, technical service, and sales teams. Emphasize the efficiency gains and the resulting resource reallocation.
  2. Revenue Growth: Demonstrate the potential revenue growth opportunities by leveraging e-commerce, including increased average order value, expanded customer base, optimized pricing strategies, better inventory management, faster order-to-cash, and improved customer satisfaction leading to customer loyalty.
  3. Competitive Advantage: Highlight how e-commerce can give your business a competitive edge by meeting customer expectations for digital self-service, personalized experiences, and convenience. Discuss the potential risks of falling behind and potential loss of market share.
  4. Long-Term Viability: Articulate how embracing e-commerce aligns with industry trends, evolving customer preferences, and the shift toward digital transformation. Illustrate the potential risks of not adopting e-commerce and the benefits of future-proofing your business.

In conclusion, implementing e-commerce into your customer support processes brings significant benefits, particularly in terms of reducing administrative tasks and driving business growth. By streamlining customer service, technical service, and sales team processes, distributors can unlock efficiency gains and allocate resources strategically.

Additionally, leveraging e-commerce enables revenue growth through product recommendations, improved service to long-tail customers, optimized pricing strategies, faster order-to-cash, improved inventory turns, and increased customer satisfaction and loyalty. By constructing a well-crafted business case that outlines these benefits, you can secure the necessary investment for implementing eCommerce and position yourself for success in the digital era.

Kris Harrington is the CEO of GenAlpha Technologies.  During her time with OEMs in the mining industry, Kris and the other founders of GenAlpha saw a need to find a better way for B2B brands in manufacturing to do business.  This led to the development of an eCommerce solution for manufacturers and distributors who want to grow their business online.  For more than 10 years, the experienced team at GenAlpha Technologies has been helping equipment manufacturers repurpose their bills of materials, 2D and 3D engineering data to make it easier for customers to safely identify and purchase parts.

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