E-commerce - Take The Plunge

In-plants worry that e-commerce may erode business relationships. The dotcom vendors have a different story to tell.

Picture yourself in a small room with your computer. You shop for groceries online. You shop for clothes online. And in your spare time, you get your college degree online.

Sound a little isolating? So does dealing with a dotcom to many in-plants. Whatever happened to human interaction anyway?

Many in-plants feel that by doing business with e-commerce companies, they will destroy the traditional relationships they have built up with their vendors and customers.

E-commerce vendors, however, feel otherwise.

"E-commerce automates processes, creates opportunities for new services and lets printers spend less time doing administrative tasks," points out Michael Sanabria, vice president of marketing at Collabria. "E-commerce solutions allow more time to be spent on problem-solving—and printers spend just as much time with their customers."

According to Sanabria, and others in the e-commerce business, long-time relationships with vendors don't have to end. You don't have to handle every single print job or purchase through a procurement or auction site. You can do some business online and some with vendors that you've used for years. Weigh your options, they say, and decide which is the best method for a particular job or purchase.

"It's not an 'all-or-nothing' proposition," says Bob Brenner, chief executive officer at Paperexchange.com. "You don't have to complete every transaction online."

In addition, teaming up with an e-commerce site can bolster your relationships with customers because it lets you offer new services to them.

Enhancing Relationships

PrintCafe is one of the printing industry's largest and most successful e-commerce providers, attracting over 7,000 print buyers and printing facilities worldwide. Although the company doesn't consider itself a dotcom, it has carved quite a niche for itself by helping printers develop e-commerce and operating systems. Printers maintain their own Web sites, but can make them more robust with PrintCafe software.

"We allow printers to actually enhance relationships," says Mary Murrin Smith, director of industry relations. "In fact, in many cases it is used as a very valuable sales tool." Some customers, she says, are actually seeking vendors with these types of systems in place.

The goal of e-commerce in the print industry is to make the process more efficient, not to replace relationships with vendors. Instead of filling out paperwork and making phone calls to find out where a job is in the production line, users can simply log on to a Web site to find out. Instead of calling vendor after vendor to get the best deal on paper, you simply put your specs up on a Web site and let vendors bid. While relationships with vendors are maintained, administrative tasks are made easier.

"Don't confuse the automation of administrative tasks with the elimination of a customer relationship," says Dave Hannebrink, senior vice president of marketing and business development at Noosh.

"Schmoozing" with customers has become an accepted practice in sales. But while building relationships with other vendors and customers is important (particularly if problems develop), at times you may just want the most cost-effective and efficient method for getting the job done.

"Just because the guy down the street brings you donuts, doesn't mean he's the right guy for the job," points out David Robb, vice president of 58k.com, an auction site that gives print buyers access to 58,000 printers. "We create new relationships. When someone needs to find the most efficient printer for the job, they come to us. You don't have to play games to get the job done."

Here Today...Gone Tomorrow

So what about the new term, "dotbomb?" There's a reason for it. The majority of dotcoms launched this year will be out of business within 12 months. Just last month, PrintNation.com, a major printing supplies and equipment Web site, closed its doors. Several Web sites are dedicated to tracking the failure of startup dotcoms because of the highly publicized number that quickly go bust. It's enough to make in-plants wary of doing any business electronically.

While that may be true of newer companies, some dotcoms in the printing industry have excellent customer bases, big financial backers and several years of experience. Still, the overall failure rate concerns many in-plants.

"You should be worried," says Michael Sanabria, of Collabria. "You need to look closely at the company you're doing business with. You need to pick a partner."

Sanabria's advice: Don't look at the prices or features of a dotcom—look at the company itself. Examine the customer base and research the management. Find out who is backing the company before you get involved.

"You need to look at a vendor's track record," advises Noosh's Hannebrink. "The types of customers usually indicate what type of organization you're dealing with." With customers such as Aetna, Wells-Fargo and Bank of America, Noosh passes the track record test with flying colors.

Going Once, Going Twice...

Auction sites are excellent avenues for saving money when purchasing items such as ink, paper and even five-color presses. Again, you don't necessarily have to purchase everything online, but when cost is a major issue, this is the route to take.

For example, when you need a specialty paper, a knowledgeable sales rep could probably help you spec out the ideal paper. But if you're buying coated stock, which is a fairly simple item to purchase, you probably don't need a lot of interaction with your paper rep. This would be an excellent transaction for an auction site.

"Some purchases don't require human contact," says Brenner, of PaperExchange.com. "You don't want to pay for high maintenance when cost effectiveness is called for."

Carpal Tunnel Purchasing

Some in-plants say e-commerce sites are too labor intensive. They require too much typing to fill out a spec sheet, RFP or job information in a reasonable amount of time. Signing up for credit approvals can be a fairly daunting task, too. Why should people go through all that typing when they can just pick up the phone and call a sales rep?

"It's like signing up for anything," explains Brenner. "You can't just call and say 'ship this to me and bill me.' You have to get credit approval."

User information can be labor intensive, but it is generally only entered during the setup period when a user first gets started using a particular Web site. Once that information is in the system (via "cookies" or user-specific logons), you don't have to enter it again.

"If you had to register every time, that would be ridiculous," says Brenner. "We don't do that."

Entering Uncharted Territory

For most people, entering into uncharted territory is a frightening thing. Most let the mavericks and pioneers scout reconnaissance before they decide to make a move. That time has come with e-commerce. Solutions from companies like Noosh, Collabria, 58k.com, Paperexchange and printCafe have been in use for a while now.

"People expect some magical 'click/done' scenario," says PaperExchange.com's Brenner. "It's really very much like the offline world."

There is nothing mystical about e-commerce. Think of how business owners felt when the telephones and fax machines came into play. They were probably just as concerned as many people are today about e-commerce.

E-commerce has now come into its own as a viable form of business. It has not only revolutionized but improved the way we do business. The time has come to embrace e-commerce.

Go ahead, take the plunge.

-by Cindy Waeltermann

In fact, most e-commerce sites say they have addressed security as the top priority. Lack of user confidence in this business would most assuredly result in failure, and e-commerce sites have reacted accordingly.