Resin distributors practically are crowing about their success in competing with third-party e-commerce firms.
But distributors shouldn´t feel as if their "victory" in holding off this new form of competition is final. They´ve just survived the first round. With technology steadily improving and newcomers learning from their mistakes, distributors will have to keep their guard up.
Reporter Frank Esposito wrote about the state of the distribution industry in our Oct. 9 issue. The dispatch included a thorough look at distribution firms´ perceptions about the state of electronic commerce.
A year ago the fear that e-commerce companies might chew up and spit out distributors was quite a sensitive topic. Web-based firms themselves were very careful to pooh-pooh suggestions that they planned to replace traditional distributors. Most made a point of inviting distributors to participate in their electronic catalogs and auctions.
But some distributors feared that third-party distributors were a serious menace. After all, if e-commerce companies planned to take a big slice of the resin supply business, that had to come from somewhere, didn´t it? While distributors were invited to the party, many of the third-party sites also actively were soliciting business directly from resin manufacturers.
Now many distributors feel like they´ve positively turned back the threat. Some Web-based competitors that just a few months ago were hyping their model for selling resin online now have moved on to other business plans.
But traditional distributors should be careful how they interpret that lack of quick success. Many processors like the convenience of ordering and tracking materials online, and their comfort with the technology will only improve.
Most distributors are working on some type of e-commerce offering to meet this demand. But others — even some of those with e-commerce in development — sound as if they were saying, "E-commerce isn´t a threat and it´s not going to be." Those are the guys who could be in trouble in a couple of years.