E-commerce boosting sales at caster company

A potential dilemma becomes an opportunity

Industrial Distribution - March 1, 2004

Mark Lippert
Vice President of Marketing at Hamilton Caster & Manufacturing Co

For much of the retail industry, the advent of e-commerce created a new, natural sales channel. But how does a manufacturer, whose sales success relies on a partnership with distributors, implement a direct-to-buyer e-commerce program, without undercutting or alienating the distributors?

At Hamilton Caster and Manufacturing Co. (an industrial wheel and caster maker), we wanted to leverage technology as much for the good of our distributors as for the benefit of the company.

In 2002, we began to develop and implement an e-commerce program. The goal: a win-win situation for our distributors, for the end-user, and for us. The solution was a program built with co-branding technology in mind. We are the only caster and wheel manufacturer using this technology.

When the e-commerce program was launched in July, 2003, we also unveiled a new corporate Web site that was integrated with the e-commerce program. Visitors to hamiltoncaster.com are now able to purchase most of the company's products directly through the Web site. However, to avoid taking business from distributors, we've implemented several safeguards.

When buyers complete their purchases and begin to check out, they must enter their ZIP code, which generates a list of distributors in their area. We encourage them to contact a distributor for better pricing. We also list MSRP pricing on the site. But we will assign a distributor to those who buy directly from the site. Thus, our distributors still gain customers they would not have had previously. Plus, there is potential for future sales.

By using our distributor e-commerce portal program, distributors are offered a branded portal site—which resides on the Hamilton Caster Web site under a different URL—at no charge. After logo and contact information are added, distributors can create a link from their own Web site to their branded portal pages where customers can purchase our products.

Frequently, distributors are looking for content for their Web sites. For investing the time it takes to fill out a short form, provide some basic graphic files and post a link on their Web site, this e-commerce portal also provides customers with a potentially new stream of revenue and customers. In some cases, distributors have been able to offset their own search engine costs with the revenue they collect from this co-branding.

When a purchase is made, the distributor is notified by e-mail simultaneously with those at our company who will fulfill the order. After a distributor portal is online, we tend to the order taking, billing by credit card and fulfillment. At the end of each month, each participating distributor receives a payment from us based on sales that came from its portal that particular month.

Our company is reaping the benefits, too, with new e-commerce orders coming in, and improved market growth for the products. In the end, what might have been a potentially sticky situation with distributors, has been turned into an opportunity.