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Discussion of the E-Commerce Conflict

Huge news. Our largest competitor just announced that it's going to sell direct to consumers over the Internet. We have decisions to make. We must stay competitive. I want to hear from everyone on what our response should be. What is the word on the street? What is our e-commerce strategy?

We all know why they've decided to do it. The fact is we want to do it too. Online sales are growing rapidly. There are a certain number of our customers who demand the convenience of shopping online. And if you have a great brand name like we do, they will be drawn to our Website and want to buy our products. If we sell online directly to consumers at retail prices, we can make higher profit margins on those sales.

Of course that's true. But as much as online sales may be growing, the heart of our sales and marketing program is our brick and mortar retail stores. Together with our dedicated sales representatives, we've devoted substantial efforts to build up our network of retailers. I don’t want to jeopardize those relationships in any way. Some of our dealers are big stores and some are chains, and many are small independent stores. Online sales may be 5% and quickly growing to 10% of the retail market, but that means the vast majority of our retail sales will come from those loyal brick and mortar stores. Our retailers remain the backbone of our marketing efforts. If we sell directly online to consumers, those invaluable retailers may well feel alienated. If we only sell online through a few key retailers who are capable of supporting e-commerce we only help the large retailers become more powerful. Some companies have decided to sell online and cut out their retailers. It didn't take long for those retailers to resent it. Orders from the retailers fell off, and in some cases they stopped ordering altogether. Why would we do something to serve the 5% to 10% of the market that is online if at the same time we're risking the much bigger retail market generated by our loyal retailers?

I understand, but we can't bury our heads in the sand, E-commerce is here to stay, and if we don't compete in that arena, we're not doing our retailers or ourselves any good. If we aren't proactive, our brand name products are going to be sold over the Internet by third parties through unauthorized channels. Sales of our products through these unauthorized channels including auctions cheapen our brand image because consumers don't have any guarantee that the product is legitimate. We potentially can lose control over how our brand is marketed. Those third parties reap the benefits of e-commerce--not us, and not our retailers, and not our sales reps. We should decide to make a large investment with our IT people to make sure we can stay competitive in the future. Our IT people should build a successful e-commerce system that somehow benefits our retailers and us. With enough money and some time, our IT people can create an e-commerce system that will allow us to stay competitive.

Wait a minute. I know e-commerce is increasingly important, but money spent on e-commerce could be spent elsewhere. However, I also know that e-commerce has the potential to increase profits and profit margins if done successfully. By selling at retail we can increase margins. By servicing our customers who demand the convenience of online shopping we can increase sales. However, we must find a solution that does not add a lot of increased costs. Our shareholders witnessed how many of the “dot-coms” of the past collapsed due to increased costs. Is there a system already in place that could solve this issue without a major increase in investment?

Speaking of costs, if we did decide to start selling directly online I won't need any additional investment. We already have the infrastructure in place to fulfill individual orders to online customers. Sure we ship large quantities of our products at a time to some of the larger retailers, but we also ship small orders to our "Mom and Pop" stores. So if we can ship just a few items to those stores, we can ship one product to an individual customer. If we give online sales the go ahead, I won't need any new investment in our shipping/fulfillment department. I can use the same personnel and the same warehouse facilities to ship the orders.

And we already have a terrific Website receiving thousands of visitors every month. We could convert many of those visitors to paying customers with no investment in additional advertising. If we spend some money on advertising, all the better, because we can drive traffic to our Website and increase sales.

I agree that by selling online ourselves we can convert marketing dollars invested into our existing Website into sales. We can also control our valued brand image, increase virtual floor-space, and capture valuable customer data. But I cannot emphasize enough--we must find a solution that is a win/win for everyone--our retailers, our customers, and ourselves.

I agree. And let's not forget our sales reps. We need them to embrace our e-commerce solution if it is going to have any chance for success.

So we're poised to take advantage of online sales. We have the brand name attracting visitors to our Website already, and we can fulfill individual customer orders with no investment in more personnel or bigger facilities. I don't want to lose out to our competition. And I certainly don't want third parties we have no control over reaping the benefits by selling our products online at whatever prices they determine and thereby creating all sorts of price pressure for our retailers and ourselves. If we don't sell online and we allow third parties to get away with it through these unauthorized channels like auctions, it's a lose/lose for all of us. Our challenge: find a way to sell directly online and service our customers and still keep our retailers and sales reps loyal and enthusiastic.

With the Online Sales Coordinator, we solve this complicated e-commerce conflict. We turn this conflict into opportunity. MWRC’s unique win/win e-commerce solution, the Online Sales Coordinator, allows you to sell online directly to your customers while including your valued retailers in the revenues from online sales. With our patent-pending e-commerce solution you will increase your sales and profits and better control your brand image while maintaining and strengthening your retailer relationships. All of this can be accomplished in a short time with no major investment in new infrastructure. Our solution is neither a theory nor a proposal. The MWRC Online Sales Coordinator is a turnkey product that has been successfully implemented into a profitable e-commerce strategy for many renowned businesses. It can very quickly do for you what it is doing right now for our existing clients--increase sales and profit margins, protect your brand name, and enhance retailers' and sales representatives' loyalty.

For more information or a real-time demonstration of the MWRC Online Sales Coordinator please contact MWRC at sales@mwrc.net or call 888-422-MWRC.