Stores Magazine - December 2007 - (Page 44)

WORTH WATCHING / E-COMMERCE The Direct Approach Program allows manufacturers to sell to consumers without bypassing retailers BY CRAIG GUILLOT O nline sales grew 24 percent to reach $102.1 billion in 2006, according to the U.S. Chamber of Commerce, while total sales grew only 5.6 percent. A study by Forrester Research revealed that 55 percent of consumers that shop online say they do so because they can find products that they can’t find through traditional channels. It’s little wonder, then, that manufacReshare was founded “for manufacturers are asking how they can create turers to be directly connected to the end more direct relationships with their conuser, and the best connection was to sumers through the Internet. With the have them involved in direct sales,” says advent of new payment solutions and chairman and CEO Adam Southam. the simplicity of e-commerce, manufac“We can do it without cutting out the returers can easily jump into the world of tailers and distributors because they add online sales, but few want to risk disa lot of value through their sales abilities turbing relationships with their distribuand product knowledge.” tors, dealers and retailers. Reshare’s hosted solution Some manufacturers are now interfaces with any eReshare’s going straight to their cuscommerce package hosted solution tomers using Reshare Distriand gives the brand gives the consumer bution Relationship Manor the manufaca retailer choice, calcuagement software, which turer the ability to lates what the retailer allows for direct sales while sell online and would have made and still keeping retailers and choose the retailer distributes those funds distributors in the mix. through which the in a highly secured consumer would and monitored likely have made the environment purchase. In most cases, this is based on geographical proximity to the customer’s home address, although the system can also be set up to allow for consumers to select the retailer. Depending on the product(s), the order can be shipped directly to the end user or to the retailer. Distributors and all other middlemen who would have been included in the transaction are given their cut of the purchase via check or electronic funds transfer through Reshare’s ProfitPay Revenue Disbursement Service. “It gives the consumer a retailer choice, calculates what the retailer would have made and distributes those funds in a highly secured and monitored environment,” Southam says. “Everyone [from the retailers and distributors to the manufacturer] can see what’s going on in their world at any one time.” Mike Ross, Reshare director of business development, says selling directly to the consumer offers benefits to both the manufacturers and the retailers. Manufacturers can make their entire product or brand lines available to consumers by giving retailers a virtual inventory: retailers win because they are involved in transactions for products they don’t necessarily have to stock. Some who may not even have a web presence can find substantial sales through the system. “It gets retailers pretty excited and it also gives them tremendous insight into what is happening within their geographic area in the online world,” Ross says. “They can then react to that.” Retailer support Minnesota-based TeamFast manufactures after-market products and accessories for snowmobiles. Many manufacturers in that industry have plans to secure dealer profits but they rarely work, says TeamFast advisor and former vice president of sales David Karpik. When the industry took a downturn in 2001, dealers lost faith in the programs. In 2005, a number of dealers opted to work with Reshare to add third-party credibility. Through real-time access, dealers can be reassured that manufacturers are not skimming direct sales. TeamFast has about 200 dealers, and Karpik says that almost all of the company’s business goes through the program. Reshare allows TeamFast to sell more of its products and push more volume directly to the consumer without StORES side-stepping their dealers. Craig Guillot is a New Orleans-based writer and photographer. 44 STORES / DECEMBER 2007 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of Stores Magazine - December 2007

STORES - December 2007 Contents Executive Editor's Page President's Page Holiday Shopping Extravagance What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Niche Marketing Eight Predictions for 2008 Concept2Watch Merchandising Strategy Sourcing E-Commerce Supply Chain Warehouse Management Software Contactless Payments Marketing Marketing Online Loeb Retail Letter ARTS Update Point of View NRF News Retail Industry Calendar Last Laugh

Stores Magazine - December 2007

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