For electrical and industrial distributor Turtle & Hughes Inc., e-marketplaces help level the Internet playing field against such massive competitors as MRO giant W.W. Grainger Inc.
"We don't have bottomless pockets like Grainger does," said Robert Millard, director of e-commerce for the Linden, N.J.-based company. "We have a good Web site, but to take it all the way, you're looking at 10 million bucks, which we don't have."
Millard and his company are working closely with BuildPoint.com, an online marketplace for the construction industry. For now, Turtle & Hughes is mostly bidding on requests for quotes that come across the transom, but the company is in the process of uploading its product catalog to BuildPoint.
Turtle & Hughes has dedicated a single inside sales rep to handle the BuildPoint business. The distributor's outside sales force gets to keep any commissions on business that companies they serve choose to deliver via BuildPoint, rather than directly through Turtle & Hughes. That way, sales people don't care how a deal comes together, just that it gets done, Millard said.
By partnering closely with BuildPoint, Turtle & Hughes can also take advantage of BuildPoint's own outside sales force. "It's easier and cheaper than adding more people on our end," Millard said. "We're looking for any help we can get."
Millard gives the BuildPoint crew high marks. "They're not a bunch of Harvard grads that have a great business model but don't know the industry," he said.
Millard said he's not so worried that his margins will be squeezed. Rather, he concentrates on the cost-of-business savings and extra business BuildPoint can generate.
"If we can get a customer using e-commerce day-to-day, especially for those $50, $100 orders, I can reduce my high overhead costs and free up my inside guys to do more selling," he said.
E-commerce comes as the building and construction industry is changing as well.
"Purchasing people are no longer experts in their field. Those days are long gone," Millard said. "It's very hard for these people to go out to three different suppliers, get quotes back in and keep track of all the paper and phone calls."
E-commerce, and e-marketplaces especially, solve a lot of these problems, Millard said.
"Our customers are driving it. We might as well work with it," he said. "We can't fight it."