Jochen Breunig Consulting Director, Sitewards GmbH jochen.breunig@sitewards.com
B2B E-Commerce Challenges in Manufacturer/Wholesale/Dealer Environments Case study:
AGENDA 1. Special Challenges for German Mittelstand 2. Success patterns 3. Case examples
Challenges 1.
GERMAN MANUFACTURING Typical CEO • Very conservative • Aged 50+ • Risk averse • Late follower • Business/Finance Background
CHALLENGE #1: ROI JUSTIFICATION Δ Visits p.a. 15.000 Ø Price ( € /#) Project Example Δ Sales ( € ) 99 Δ Sales (#) Δ n. Clients (#) Conversion r. 200.475 3% 2.025 1.350 Δ Ø Price ( € /#) Ø Cart (#) 3 5 Δ Price rea. ( € ) Absatz vor (#) Δ Visits p.a. 7.500 Δ Revenue ( € ) 60.125 10.000 Δ Absatz (#) 260.600 2.025 Δ Repurch. (#) Conversion r. 3% Δ Absatz (#) 675 Δ Profit Δ Var. co. ( € ) 2.025 Platform ( € ) Ø Cart (#) 3 Y1 -74.650 Marg. co. ( € /#) 60.125 250.000 From Y2 225.350 50 Int. IT ( € ) Platform ( € ) One time c. ( € ) Δ Cost ( € ) ROI (5Y) = 3,31 50.000 300.000 335.250 414.000 Serv. p.M. ( € ) Opex. ( € ) 3.000 Δ Marketg. ( € ) 114.000 Optim. p.M. ( € ) in Sales ( € ) 0 3.000 -100.000 By Proc. Δ ( € ) Ext. p.M. ( € ) in Logist. ( € ) -180.000 -50.000 3.000 Other ( € ) Hostg. p.M. ( € ) -30.000 500
CHALLENGE #2: DISTRIBUTION CHAIN B2B option space B2C option space Manufacturer Wholeseller Dealer Retailer End Customer
Solution Patterns 2.
TYPICAL THREE STEP EVOLUTION 1. Proof of Concept 2. Integration 3. Roll-out
“LOW RISK” START INTO E -COMMERCE 1. Proof of Concept • Limited Product Range: Spare Parts & Supplies only • Outside Core Market: Start E-Commerce in small country overseas • B2B self-service-portal: “Help” the supply chain (retention!) • Reduce internal transaction cost: Tools for sales force (e.g., configurator) B2B E-Commerce (without changes to supply chain itself!) …
START INTEGRATING SUPPLY CHAIN 2. Integration • Pilot platform: Collaboration with 3-5 key players • White label: NEW Supply chain for seemingly unrelated product (risky!) • Dealer Expansion: Use platform as international gateway • Start connecting the chain: One platform across multiple levels
REACH LEVEL OF PURE PLAYERS 3. Roll-out “Your favorite E-Commerce pure player solution” Now imagine … and transfer it into a € 270B market!
Case Examples 3.
SENATOR: REDUCE PROCESS COST Business Case Product Configurator • Streamlined design, ordering, production process • Mass Customisation • Reduced error rate and communication overhead • Faster design process • Reduced time from request to delivery Business Case Supply Chain • Dealers can spawn sub shops • SAP connection
OTHER CLIENT EXAMPLES Chemical ingredients Milling machines Industry remote control • Pilot: E-Shop in • Proof of concept: • New channel trial: Direct German unit Spares & Supply Sales to End Customer • Full ERP integration • Reduced process cost: • Small E-Commerce pilot ERP integration entry prior to rollout • Next potential step: • Preparing European Roll-out across Europe rollout
So What? • It’s not about “B2B”, it’s about complex supply chains • Mittelstand as highly profitable backbone of German industry, but with special challenges • Typical steps for a successful E-Commerce entry
THANK YOU Jochen Breunig Consulting Director Sitewards GmbH +49-(0)151-577 637 87 jochen.breunig@sitewards.com
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