SupplyForce.com started operating in 1999 as a business-to-business dot-com portal, where major companies like aerospace manufacturer The Boeing Co., construction materials manufacturer Louisiana Pacific Corp. and the U.S. Department of Energy could buy from a network of independent distributors of maintenance, repair and operations products ranging from janitorial supplies to metal-cutting tools.
SupplyForce.com was ahead of its time, and offline channels accounted for most of its sales for several years. But over the past four years it has been going through an online rebirth, with annual growth in web sales averaging 25%.
John Ludlam, executive vice president, attributes the surge in online sales to the changing demographics of business buyers, many of whom purchase online for personal reasons and expect to do the same in business transactions. Also playing a role, he says, are the changes afoot in corporate purchasing policies, which now more commonly allow for Internet-based purchasing than in the past.
In addition, SupplyForce relaunched its e-commerce site in 2011 on Unilog Inc.’s CIMM2 software, which was better designed than SupplyForce’s prior set-up to manage web content and product data, and provide effective site search and navigation, Ludlam says. This year, SupplyForce expects its web sales to hit $60 million, or up to 15% of expected total sales of $450 million, he adds.
SupplyForce is a sister company of Affiliated Distributors Inc., an industry group that provides branding and marketing assistance to more than 500 independent distributors and manufacturers of MRO products. SupplyForce launched in 1999 as a way to help many of the local and regional distributors among Affiliated Distributors’ members to participate in online national account sales to the likes of Boeing and Kraft. But the SupplyForce.com site didn’t offer the technology required to present products online from a large number of distributors, Ludlam says.
In addition, many of the portal’s major customers were operating on multiple enterprise resource planning, or ERP, systems, making it difficult for them to order from the SupplyForce.com web catalog and integrate order data with their financial accounting and other business software. “Many didn’t have the capabilities of using web catalogs even if they wanted to,” Ludlam recalls. So most sales were offline or partly through electronic data interchange, instead of through the e-commerce site.
By 2010, however, SupplyForce noticed a renewed interest among its customers in purchasing online; it responded by seeking a new e-commerce platform that would be easier to manage and for its customers to use.
After meeting Unilog, it chose its CIMM2 software, Ludlam says, because it offered an unusual mix of core applications on a single platform—product information management for maintaining accurate data on product descriptions and images, a content management system for managing merchandising displays and other web content, site search, and the e-commerce shopping cart.
Along with the spike in online sales, Ludlam says, SupplyForce has been able to reduce its operating costs as more customers use online self-service to place orders. But the main reason for building the new online presence, he adds, is to satsify customers seeking to buy more online.
“We do the web catalog not just for cost savings; it’s for customer service,” he says. “It’s how many of our customers want to buy.”
CIMM2 start-up costs typically range from $250,000 to $450,000, followed by subscription fees that range from $4,000 to $8,000 per month, based on transaction volume, number of SKUs and number of users, according to Suchit Bachalli, Unilog’s president, North America.
Bachalli adds that Unilog plans to continue specializing in developing e-commerce software for mid-market distributors. “Our focus was, is and will always be mid-sized wholesale distributors, an often overlooked sector of the e-commerce market,” he says.
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