The idea, however, got a decidedly cold reception from the nationwide network of 950 distributors through which Miller had been selling its products since 1929. Some distributors worried they'd be squeezed out if consumers started buying directly from Miller.
"We were concerned, [and] the last thing we wanted to do was have Miller say they'd sell direct and drop-ship to you," said Scott Chenoweth, president of one of Miller's distributors, Texas Welder Supply. "The distributor really adds value to the chain."
Executives at Miller listened and, in January, rolled out an e-business strategy that includes distributors. Miller launched co-branded Web sites for a limited number of its top distributors. Consumers visiting Miller's site to buy welders now receive a list of the closest distributors along with links to their co-branded e-commerce sites, which have up-to-date product and pricing information from Miller. Distributors retain control of the orders and other transactions, but Miller, a subsidiary of Illinois Tool Works, controls its brand by giving the 60,000 monthly visitors to its site a way to purchase online.
Already the approach is paying off, said Senior Vice President of Marketing Tim DeMars, who led the project. In the last two weeks in January, traffic on Miller's site doubled compared with the monthly hit rate at the end of 2000.
Miller's move to embrace, not bypass, its distributors is becoming more common as companies realise that there's more to e-commerce than selling directly to consumers. Companies with strong channels are welding tighter online relationships with distributors, retailers and other channel partners. Their goal is to avoid channel conflict, while maintaining some control over the way online sales are handled through distributors and the way manufacturers' products and brands are represented through channel partners online. That means making sure that product and inventory information is accurate throughout the channel and that brandsâ€"whether represented through logos, slogans or defined by the online target audienceâ€"are treated consistently on distributors' and retailers' sites.
