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Three years into a pandemic has convinced one B2B seller that digital commerce is the top priority—and the way forward.
Industrial products distributor Sustainable Supply drives a significant amount of its revenue through its ecommerce websites, which the company uses as a lead-generation tool for its full range of distribution services, says CEO Brian Fricano. “While we’re ecommerce-first, we’re still very much a distributor,” he says, asserting that Sustainable Supply provides extensive services and expertise to B2B customers that go beyond simply offering a wide range of products.
Sustainable Supply is an online distributor of more than 1 million products ranging from building materials and plumbing supplies to equipment that companies use to maintain, repair, and operate their facilities.
The company is doubling down on its ecommerce-driven strategy with a multipronged approach to stand out as a distributor. To generate growth in 2022, it is fine-tuning inventory with more products and related services its customers need, introducing more helpful website features, such as more payment and financing options, and sharpening its digital marketing efforts. And it has ceased selling on Amazon.com, Amazon Business, and other marketplaces, allowing it to focus more effectively, Fricano says, on sales through its owned and operated ecommerce sites: SustainableSupply.com, EyewashDirect.com, TotalRestroom.com and PortableHandwashing.com.
Sustainable Supply believes a new approach will differentiate it among competitors and avoid only relying on selling basic items commonly sold by other distributors. “We are really trying to build a moat around our companies and protect ourselves from getting into commodities,” Fricano says. “Instead, we are focused on specialization.”
Over the last few years, Sustainable Supply has worked with its of its suppliers to identify what products complement one another to improve its cross-selling strategy. If a customer is searching for an eyewash station, for instance, the website can list any other necessary accessories as well as other products that complement the purchase, including explanatory documentation in the form of PDFs written by a team of technical writers. The distributor has found that providing useful product descriptions and easy downloads of technical PDFs are useful for customers and help generate repeat business.
In 2021, Sustainable Supply cut the number of products it offered its customers. “We wanted to ‘reduce the noise’ for customers,” Fricano says. “We were adding 20,000 to 30,000 product SKUs per year, in line with our competitors, but last year, we stepped back.”
That pullback allowed Sustainable Supply to analyze what customers were buying and use that knowledge to differentiate its inventory from that of competitors. Instead of focusing on commoditizing, Sustainable Supply emphasized the quality and promptness of its technical and sales support teams to help customers purchase the products they need or get assistance from a salesperson.
After reducing inventory in 2021, however, Fricano says 2022 is a year of product expansion. “But we’re looking to expand in a different way,” he says.
The distributor is adding SKUs to specific divisions, such as commercial construction, where demand is on the rise.
“There are different specialties within each vertical—with new construction, there are toilet partitions for commercial restrooms, flag poles, marker boards or visual display boards, wall paneling; we’re offering products that complement these projects,” he says.
Sustainable Supply also made strategic changes to its website, which runs on the Shopify ecommerce platform. Shopify, a “unified” ecommerce platform designed to provide a consistent checkout experience across a seller’s multiple channels, has made online purchasing easier for the distributor’s customers, Fricano says. “Shopify has a really easy flow for customers at checkout,” he says. “It’s a checkout process they’re familiar with.”
Sustainable Supply has focused on removing underperforming website functions and invested in personalization, cross-selling, and upselling. It is also working to improve site search. But after analyzing website user data, the distributor decided to remove other features, including subscription-based and automated reordering, and international shipping plug-in calculators. “These features just didn’t work,” Fricano says. “There was a low adoption rate, and it created more confusion for customers.”
“We were able to determine which features weren’t really effective and probably created more distraction on the website, which took away from the user experience,” he adds. “2021 was a year for us to return to the basics, and we’ve had a lot of success with it and good feedback from customers so far.”
Features that are proving worthwhile, however, include credit checks for customers interested in financing a purchase. “They can open an account and make a purchase on their own without having to call,” he says. “Maybe a customer wants to finance a piece of equipment like a new freezer for a large restaurant—the customer should be able to pick their payment terms.”
Splitting up purchases over two or four payments over a period of three to six months is another draw. On the Shopify platform, Fricano says, it is relatively easy to offer flexible payment options to customers. “Buy now, pay later (BNPL) is popular with B2C, and it’s starting to get some traction in B2B,” he says. “We have a robust open account system here already, and this automates it right on the website, where customers can complete it at checkout automatically. We’re excited about that.”
With a focus on personalization and brand loyalty, Fricano says selling on marketplaces no longer fits with the distributor’s goals. “We had significant challenges running through Amazon, especially with supply chain concerns,” Fricano says.
Exiting marketplaces, however, has led the distributor to build stronger relationships with suppliers and customers, he says. In turn, Sustainable Supply gained feedback on market demand to help build the right inventory that customers want to purchase, resulting in more sales through its ecommerce sites.
The increased business from loyal customers has recouped any revenue lost by exiting Amazon and other marketplaces. As Sustainable Supply focused more time on existing customers, they have increasing order volume, Fricano says.
He adds that Sustainable Supply was not gaining any customer loyalty by selling through marketplaces. “Close to 100% of buyers from Amazon were one-time buyers,” he says. “Buyers are loyal to the platform, not the seller.”
Logistics and supply chain problems also made it difficult to manage selling on Amazon and other marketplaces, he adds. “By the time we sent a purchase order over to our vendor, they’d be out of stock,” Fricano says. Sustainable Supply would then need to cancel the order.
“Managing expectations in marketplaces and our own website became a logistical nightmare,” he says. “The amount of effort we were spending on these transactions drove us to leave marketplaces. The channel will always be there if we want to get back into it.”
In addition to making improvement to its customers’ purchasing experience, Sustainable Supply will invest in digital marketing this year to drive more traffic to its websites, Fricano says.
Cost-per-click advertising in Google and Bing, however, has grown exponentially, he says, resulting in high ad rates. “It’s become more costly to acquire customers through paid search,” he says. Moreover, privacy updates limiting third-party data after Apple’s iOS 14 update, and Google’s plans to block third-party cookies in 2023, make it more costly and less useful for businesses to acquire customers through paid search, Fricano says.
As a result, Sustainable Supply reduced its ad spend in Q4 2021 by 10%. “The return on ad spend wasn’t there,” he says.
Instead, Fricano says, his company has reallocated that ad spend into hiring writers who develop more attractive and relevant web content designed to improve search engine optimization and natural search rankings. “We’re offering curated products for different market settings,” he says. “If you’re a campground or RV park owner or manager, we have a section on the website that caters to that—if you’re a restaurant chain or office building or retail, there’s a section for that.”
The distributor is actively working with customers in sectors where demand is increasing. “This year, sales of our facility safety products, which were down nearly 25% last year, are up 25% this year,” he adds, noting that, during the pandemic, factories were not running at full capacity but have since picked back up again.
Pandemic-related challenges remain, Fricano says. But Sustainable Supply’s combination of ecommerce features, personal service, and digital marketing will help it stand out in a commoditized industry.
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Copyright © 2022 Digital Commerce 360 | Vertical Web Media LLC
Copyright © 2022 Digital Commerce 360 | Vertical Web Media LLC