Leveraging B2B eCommerce Opportunities in Chemical Distribution

By: | Category: Distribution / Manufacturing, Web / eCommerce

Gone are the days when eCommerce only meant being able to place an order online, and as we covered in a previous post, chemical distributors should at least be evaluating if eCommerce is right for their specific business model, as companies like Amazon, with logistical strength, may start to become a threat.

Today, many distributors are looking to enhance their digital B2B capabilities, but at the same time are concerned about losing the intimacy of working with a customer directly on a telephone or in person. But with chemical distribution sales projected at $368 billion by 2022, Amazon and similar platforms have plenty of reasons to move in on the industry.

It is crucial that wholesale distributors in the chemical space be prepared and know their strengths and weaknesses. Here are some of the opportunities chemical distributors can leverage:

  • The chemical industry is hugely fragmented and well suited for eCommerce. If properly implemented, distributors can leverage this fragmentation and their niche in the market to find success through a strategic eCommerce platform.
  • Distributors can leverage a digital technological enabled ERP solution like Sage Business Cloud Enterprise Management (Sage X3), to meet the modern challenges of the industry.
  • Customers spend about 70% of their time searching the internet for product information and just 30% on sampling, negotiating and purchasing (Wolfgang Falter, Deloitte Global). e-business presents distributors an opportunity to align their systems around a new era of buyers and decision makers.
  • Distributors can leverage customer loyalty, better capacity utilization, lower inventories, and lower earnings volatility.

Although, the chemical industry is very specialized and many customers are old-fashioned, a shift can be expected in the coming years with a growing number of Millennials now entering the work force. The chemical industry will have to make changes to encompass the end-to-end process of selling products, this includes using eCommerce tools and hiring Millennials.

Chemical distribution is entering a new digital era with companies able to access platforms that help reach new customers and understand buyers’ preferences. The key is for distributors to be prepared.