How to Sell Building Materials Online on e-Commerce Sites Like Amazon
If you are a manufacturer or marketer of building materials today, you are likely feeling the pressures of how to sell or offer your product online on e-commerce sites like Amazon or big box retailers like Home Depot and Lowe’s. Depending on the details around the product you offer---like who you typically sell to, how easy it is to install and even how your product is shipped---can impact how you go about selling online.
Whatever the specifics are for your product, you likely have some opportunity to sell building materials online on Amazon and other marketplaces. Why? Because there is at least a portion of your target audience that would rather do business that way for a variety of reasons.
Convenience Always Wins with Customers
Traditional distribution in building materials is being disrupted and brick-and-mortar partners are feeling those pressures and adapting in their own way. Customers are demanding more selection, faster and at a better value—all of which are forcing distributors to carry less inventory, reduce the number of brands they feature and be laser focused on only select products. If your brand is not one of those select products, you likely will continue to see struggles in growth rates in traditional distribution.
Channel Conflict is Always the Top Concern – But History Proves Otherwise
Many building material manufacturers are hesitant to consider selling their products online simply because of channel conflict concerns. While they’re worried about upsetting traditional distribution, those same customers are evolving themselves---simply because the need to in order to remain relevant. Similar to concerns in the early 2000’s where partnering with big box like Home Depot or Lowe’s was taboo, your traditional distribution partners will soon accept manufacturers selling online as the norm simply because the customer demands it. There really is no other choice.
There’s the old saying “The only thing constant is change” and that’s obviously true in business. Evolving to customer preferences is at the core of long term success. How you manage, present and pursue new opportunities to satisfy your customer is the top priority of any leadership team – and online sales is that next wave of change.
Home Improvement Sales are Growing Online - Quickly
The Department of Commerce reports on e-commerce sales by industry every year. According to those reports, ecommerce represented 9.2% of total hardware and home improvement sales in 2017, up from 8.0% last year. According to those same reports, roughly 25% of those sales are happening on Amazon. Obviously, the Commerce Department statistic category is large and covers many segments, but the data shows the customer is looking for more.
There are other significant signs of growth of online sales in the category. Sites like Home Depot and Wayfair are growing extremely fast – landing both sites in the Top 10 eCommerce of retail sales in the US. While playing catch up to a degree by comparison, Lowe’s is seeing similar growth of online sales – reporting a 20% increase in online sales year over year from 2017.
Both Home Depot and Lowe’s offer a free in-store pick up, which is a competitive advantage that Amazon can’t match. Not only does it bring people into the store that purchase more for their project, but it helps both retailers in the “last mile delivery” and avoiding residential addresses.
How to Get Started Selling Building Materials Online
While selling online can be seen simply as an extension to a retail sales channel, there are other considerations that are unique to this sales channel that need to be considered. But the initial process is the same as any new opportunity – start with designing a go-to-market strategy and plan that matches the company vision, culture and operations.
The highest levels of leadership must support this effort to be successful. The notion of a “toe in the water” to try out the online sales channel is not recommended. It requires transformative efforts across many areas of the organization that must be endorsed by management.
· KPI’s and Goals – leadership expectations vs reality, ranking priorities against time and resources available, investment planning, how we get there, timing and action steps.
· Target Audiences – not just who they are, but what is needed to convert them, how they shop for these products today, what are the competing products, why do they buy them, how do we position against.
· Rules of the e-Game – integrating the expectations from the marketplace partners and their customer within the Derby organization and culture. Logistics, shipping, RGAs and return, turnaround times, technology enablers like EDI, GDSN and other mandatories for driving performance.
· Product Catalog + Assortment – what are good fit products long term, not just in the initial launch and identify how those products will be supported within the channel.
· “Digital Shelf” Content - identify the content required by product to support a high performing product listing page for each SKU. This includes copy content, image assets, installation tips, warranty details, videos, enhanced A+ content and other areas of content within the platforms.
Success Starts with Leadership Buying In – And An Openness to Drive Change
As an e-commerce consultant working with building materials brands, I’ve seen what success (and the opposite) looks like from a structural standpoint. The structure of your e-commerce resources from a staffing standpoint is a key factor to future success.
This sales channel takes leadership from the CEO down through the organization because of the transformation that will be required. Those that make it a key strategic growth initiative and adapt to the drivers of e-commerce success are those who win.
Some companies I’ve seen try to treat this like any other sales channel—assigning it to a head of sales who likely feels threatened by this online channel that doesn’t involve the traditional sales nurturing, handshakes and relationships to a retail sales channel or otherwise. Assigning e-commerce to the head of sales is typically a major red flag.
E-Commerce in building materials must be driven by the CEO and their leadership team. It’s that simple. Silos need to be broken down in the name of the customer experience – and that takes authority and priority.
Transformation to E-Commerce for Building Materials – Is It Worth It?
The answer is absolutely. While the initial effort of driving an organization to be more customer-first, breaking down silos and thinking like a “digital native” company who sells exclusively online will be a lot of effort and investment, there is no doubt the changes made within the organization will benefit all customers (not just those that buy online). The notion of speed, selection, value and a superior customer experience is what every customer wants – and your organization will be better for it. Not to mention, the bonus of access to more customers, more visibility and long-term growth --- and the e-commerce sales channel should be a very high priority for any brand manufacturer in building materials.
Are you challenged by the idea of selling products online?
Please contact me to discuss how I can help you identify your sales opportunities and strategies to sell in the e-commerce channel.
About The Author
As managing partner of Market Thrive, I am focused on helping building material manufacturers to launch or optimize eCommerce channels to drive growth, new sales and a modern customer experience. I help organizations fuel online sales faster, more strategically and in a manner that fits with other sales channels. I have over 15 years of experience in building materials marketing and have worked with brands of all sizes and product categories to drive new sales, new strategies and most importantly – results.