A lot of industrial marketers are lagging far behind in e-commerce and need an inexpensive way to attract customers. So Paul Baier, chief executive at start-up PurchasingCenter.com, devised a Web site where these customers – generally midsize companies – can buy maintenance, repair and operating (MRO) supplies. The site also offers distributors the opportunity to auction off excess inventory.
“Maybe only three of the top 100 industrial distributors had their own Web sites and [knowledge of the] Web generally was very low,” says Thayer Stewart, marketing director at the Burlington, MA firm.
The site now lists more than 3,000 products, some $2 million in inventory. Stewart says the centralized site can cut procurement costs as much as 30% since companies don’t have to spend as much money and time trying to find products.
Those interested in doing business on the site (www.purchasing center.com) can specify the items they need either by part name or company name. Bargain hunters can click on the auction pages and try their luck.
Revenue Sources
On both the purchasing and auction sites the company takes a 6% commission, says Stewart. PurchasingCenter.com is also pulling in a bit of revenue from site advertisements.
So far, about 6,000 distributors have registered on the site. Registration is free.
The company is spending its $1 million ad budget on direct mail, trade magazine advertisements and even Web banners. The banners do well because their cost per thousand is so low – about $20 to $30 – compared with, say, $300 for mail. Additionally, the site is being promoted on Internet search engines.
Stewart says that the mailings, which encourage recipients to register on the site, have been getting just under a 3% response rate and almost a 50% conversion rate.
On top of this, PurchasingCenter.com’s three salespeople have been calling on the more than 150 large U.S. industrial distributors.
>From these efforts, Stewart expects to land nearly $1.5 million worth of >business this year, and 10 times that by 2001. But it may not be so easy.
“A lot of industrial marketers aren’t that comfortable with the Net,” he says.
Network
