Ingram challenges Dell's
Web sales
By Tim Clark
Staff Writer, CNET NEWS.COM
July 14, 1998, 6:00 p.m. PT
Gearing up to battle Dell Computer's direct sales
model, distributor giant Ingram Micro will host
e-commerce sites for 200 of its top resellers, giving
them their own branded Web computer stores with
"back office" and commercial services provided by
the Santa Ana, California, company.
In addition, Ingram will let
its resellers incorporate its
technology into existing
storefronts, enabling them
to add sales to
informational catalogs.
The program eventually
will support multiple
languages and currencies,
so it can be expanded
internationally as well,
according to David
Carlson, Ingram's chief technology officer.
The scheme could provide the means for small and
medium-sized computer retailers to neutralize the
advantages of Web-based direct sales employed
by Dell, Gateway, and others. Surging Dell claims
as much as $5 million a day in online sales.
"If it's made easier for resellers, it will drive more
volume through that channel," said Brad Haigis,
product manager at Open Market, whose company
is licensing its e-commerce software and providing
integration services to link the e-commerce sites
with Ingram's existing back-office systems.
"It not only provides a valuable service to resellers,
but it will provide a tendency for them to be more
loyal to Ingram," Haigis said. "Ingram sees it as a
highly strategic competitive advantage--to take
market share away from their competitors."
For resellers, the PrimeAccess program offers a
way to compete with the direct vendors'
on-the-Web ordering. "Dell is going direct to
customers, but resellers don't have the
infrastructure. Ingram is basically a dealers' friend
to set up very sophisticated sites, giving the dealers
a basis to compete," said Roy Satterthwaite, an
e-commerce analyst at Gartner Group.
"With large [companies like Dell] going direct to
customers, smaller businesses don't have the
wherewithal to compete," he added. "So they're
relying on their trusted, 'old world' business
partners to make them more competitive, to deal
with the 'disintermediators.'"
Ingram's move to host reseller stores--the first ones
will go into beta testing this fall--comes under an
emerging category called the commerce service
provider (CSP). To date, most CSPs have been
traditional ISPs or hosting services that expand into
handling storefronts too. Ingram appears to be the
first distributor in any industry to join the CSP
crowd.
But the hosting initiative isn't Ingram's only effort to
cozy up to partners. In March, the company began
assembling computers for Hewlett Packard,
Compaq, and IBM, a move that also speeds up
Ingram's delivery of machines to resellers.
Ingram also runs an extranet auction open only to
its resellers, allowing the company to unload excess
inventory and dealers to scoop up bargains.
"Ingram can do a double whammy--get rid of
inventory and offer Web hosting services," said
Varda Lief of Forrester Research. "The larger idea
is what companies are doing with their dealers for
stronger loyalty. There's not really a downside."
Another Forrester analyst, Bruce Temkin, sees
Ingram's hosting effort as consistent with smaller
firms outsourcing businesses processes that are
critical but don't give them a basis to differentiate
themselves from rivals.
"It's outsourcing your back office for electronic
commerce," Temkin said. "It's exciting to see
electronic commerce service provided at a whole
level across smaller businesses. The people who
turn to their wholesaler, like Ingram, turn to them
for lots of services. Now it's doing the same with
e-commerce, providing the scale to smaller
resellers who can't afford to do this on their own."
Neither is the current initiative Ingram's first effort at
building storefronts. In June 1997, the wholesaler
worked with networking firm 3Com to launch
3Com's storefront.
But that effort could not be replicated for other
vendors, and the experience led the Ingram
executive who oversaw that project, Fadi
Chehad‚, to launch an organization called
RosettaNet to push e-commerce standards. |
