December 27, 2000, 5:11 PM — Miller Electric has launched an ambitious e-commerce strategy designed to make purchasing easier for customers, but without leaving its distributors out in the cold.
Distributors were concerned that the welding-equipment manufacturer might start selling directly to customers once it bolstered its e-commerce system, and Miller officials acknowledge such a plan was on the table. But in the end, the company determined that it was more important to remain committed to its 900 distributors.
As a result, Miller has crafted a "virtual weld" between its Millerwelds.com site and the Web systems of its distributors. This enables buyers to browse among hundreds of products at Miller's Web site, but transfers their shopping carts to local distributors' sites when buyers want to make purchases.
To make this work, Miller and its distributors have become the first users of a service called iCommerce that InfoNow introduced last week.
When Miller's Web content manager in Wisconsin updates the items and list prices at the Millerwelds.com site each month, the same update file is transmitted over the Internet to an iCommerce server housed in the InfoNow data center in Denver. The server transmits selected information to each of Miller's distributors. Miller, as the wholesaler, gets to use the service for free; distributors must pay InfoNow $500 per month.
For this fee, distributors get the Miller items updated on their servers, although the distributors set their own prices for what they sell on the Web. The main benefit for distributors, though, is that buyers preparing to make purchases at Millerwelds.com are whisked automatically to the appropriate distributor's site based on ZIP code. If there is more than one local distributor, the buyer is presented with a choice and the chance to compare prices.
Miller is informed of successful transactions, says Sue Feldkamp, electronic communications manager at Miller, which generates half a billion dollars in annual sales.
Last year, Miller's Web site featured a catalog but no way to complete a transaction. When potential buyers e-mailed or called to find out where to purchase welding gear, the company started referring these leads to its distributors.
"We had a 50% closure rate [in sales] from these e-mail requests, and 60% of the online users said they wanted to purchase online," Feldkamp says. This prompted Miller to begin discussing e-commerce strategy with what it calls its "board of distributors," a dozen distributors with which it regularly confers.
The Web-based selling arrangement being implemented by InfoNow requires Miller Electric distributors to dedicate Web servers to the display of only Miller products. In the future, buyers who visit a distributor site may see Miller products only when directed to the site from Millerwelds.com.