Written by: Kris Harrington
When considering the addition of an eCommerce sales channel, the relationship between a manufacturer and its dealer network will likely become a challenge to navigate. While eCommerce presents a tempting revenue opportunity for the manufacturer, downstream channels will undoubtedly have an opposing mindset. Despite these reservations, the traditional business model has been altered with the advent of eCommerce. A digital sales strategy is no longer an option; it’s a requirement.
End-users do not make a distinction between dealer and manufacturer in their purchasing decision, they are seemingly interchangeable. The end-user is looking for a convenient purchasing experience that suits their individual needs. Whether that means purchasing directly from a manufacturer via eCommerce or locally from a dealer, they are looking for convenience. Traditionally a manufacturer was only expected to provide the engineering and design expertise, while the dealer provided the local expertise and service. Distribution channels have been the driving force in the creation of brand value, thereby generating market demand for a manufacturer’s products. eCommerce has opened new sales channels for both original equipment manufacturers and their dealers.
Offering an eCommerce sales channel is essential, but manufacturers and dealers must manage the evolved buying relationship together. There's still a consequential need for the manufacturer-dealer relationship, and the absence of one will inevitably lead to the irrelevance of the other. The time for considering an eCommerce sales channel has passed, manufacturers need to take action now, in order to ensure their success in the future.