The Manufacturing Executive
The Manufacturing Executive

Episode · 2 years ago

The Incredible Shrinking Pie: Why the Future Lies in E-Commerce w/ Kevin Haar


It's time to face reality about sales channels, technology, and how people buy.

E-commerce is going to dominate sales. Business was moving in that direction pre-COVID, but the pandemic dramatically accelerated those trends.

You can fight this reality, or you can grow with it.

On this episode of the podcast, I talked with Kevin Haar, chief operating officer at Super Bright LEDs, about the transition to e-commerce.

Kevin and I discussed:

  1. What e-commerce can offer now that it couldn't in the past
  2. The impact of online sales in different parts of the organization
  3. Roadblocks and challenges in e-commerce adoption

To ensure that you never miss an episode of The Manufacturing Show, subscribe on Apple Podcasts, or Spotify, or here.

... you may as well be in a world where you can grow with it instead of trying to fight this wave that's about just destroy. Welcome to the manufacturing executive podcast, where we explore the strategies and experiences that are driving mid size manufacturers forward. Here you'll discover new insights from passionate manufacturing leaders who have compelling stories to share about their successes and struggles, and you'll learn from B tob sales and marketing experts about how to apply actionable business development strategies inside your business. Let's get into the show. Welcome to another episode of the Manufacturing Executive podcast. This show is being brought to you by our sponsor, coudinas part solutions. I'm Joe Sullivan, your host and a cofounder of the Industrial Marketing Agency Gorilla Seventy six. Go ahead and transport yourself back about fifteen years or so. It's two thousand and five and maybe you're in the market for a new car. Perhaps you're doing a little bit of research online. More likely, you're just visiting dealerships because, well, it's two thousand and five and you're only a handful of years removed from your AOL dial up connection. Regardless, what you almost certainly aren't doing is jumping on Carscom or Carvan oor auto trader to make an actual purchase. And in fact, to most of us that idea would have seemed completely insane at the time. But how quickly the world changes. Today we're not talking about buying and selling cars, although that's a hot topic in my own house right now, but we are talking about e commerce, and specifically e commerce for manufacturers. Many of you listening right now, like a majority of my clients, might be saying to yourself now, this isn't for us. We saw five hundred thousand dollar equipment through six months sales cycles, with lots of engineering and customizations. E commerce will never be a part of my world. Okay, fair, but there's a reason I used the online car retailer example to kick off this episode. The market place is changing, buyer behavior is changing and we can't turn to block turn a blind eye to that. Be Ready and educate yourself, because if you're not missing opportunities yet, you almost certainly will be soon. So, on that note, I'd like to introduce someone who lives a right inside this world of B Tobe Commerce. Kevin Har is chief operating officer. It's Super Bright LEDSCOM and e commerce leaders, specializing in the private labeling of led lighting. He's been there since two thousand and fourteen and prior to that worked in financial services. Kevin has his B us from the University of Vermont and MBA from Washington University in St Louis. He resides in St Louis with his wife, allison and their three children. Kevin, welcome to the show. Thanks, Joe. Excited awesome. So can you start by talking a little it about the shifts that you're seeing in consumer buying behavior in recent years, particularly in...

...a be tob setting? Yeah, I think you know we've all kind of seen this over the last twenty years of just the growth of ECOMMERCE and people becoming more and more comfortable and familiar with the commerce. But I think go over the neck last year in particular, you're seeing this rapid change and this rapid acceleration due to covid in terms of like how that impacts be to be. I think you know you're seeing now kind of this rush for businesses to start looking at opportunities, to look for more direct sales to their customers. Then also, you know, purchasers are almost requiring at a time. So even the government at you know, is making the push. So you're seeing this just rapid movement to ECOMMERCE, which more transparent and direct. Yeah, I imagine that everything going on this year in particular is just forced people who maybe it was on their minds and they knew it was on the horizon to say, okay, I guess now's the time because, you know, people are, it's as stuck in their homes and yeah, it's a big thing that's to swallow and you know, obviously it's a big change and I think a lot of times as a business operator you're thinking, yes, it's something we want to do, but to actually make that commitment and make that change, and I think this year was a little bit more of a push for people to do that. And also you're seeing it with platforms, you know, different ARP platforms that were, you know, traditionally like not necessarily focused on ecommerce now offering kind of more of an opportunity for businesses to do that. So you know, it's it's definitely there. So it's the bilmost becoming more ex possible to the the companies who have yeah, absolutely, I mean it's, you know, it's just the tools that are out there, the connectors and the ability to kind of take your business. It's I think a lot of times people think it's just this overwhelming process and don't you're wrong. It is it. It can be tough and but it's not possible. And just getting the right group of people together to have those conversations. I think it's not necessarily the hurdle that you think it may be. What opportunity, Kevin, do you think that manufacturers are missing right now by not embracing ECOMMERCE? You know, I think I kind of alluded to it, you know before, just talking about even not only just these individuals and these purchasing departments that are kind of moving more to the commerce but obviously the government to and but I think people are viewing the world as it is today and not necessarily like what it is for the future. And like one of my favorite quotes was the from Jeff Bezos, so so in a book of the Amazon Way and he's mentioned he's discussed a question like how much further can we go with this? And he said like when a factory in Paraguay can buy a railroad box car full of box site from a mine in China and transacted over Amazon, then we might be done. And so when you think about the efficiencies that still are able, that are out there, that you can capture and not necessarily like this really long thick supply chains, I think for a manufacture you have to start thinking yourself. You know, what does not only my purchasing supply chain look like, but like what does we're is the end consumer of the product that I am manufacturing, and you know, what does that... chain look for that customer? And you know, are there other companies out there, are competitors that are taking a more direct route, which would then potentially limit our ability in the future. So I think for a manufacture you really need to start thinking bigger and thinking about the challenges that are out there, not necessarily just stuck in this old, the traditional way of it. This is what we've done business, this is why we've sold, and start thinking about, you know, what potential impacts are there for newer, innovative businesses that can take a more direct route to the end consumer, which would obviously lower cost. Yeah, no, that's a good point. Well, let's see you. You were, you and I were recently talking about this idea that you know, moving into ecommerce is much more strategic, a more strategic play than just saying, Hey, we've got an online store now, right. Can you talk about the impact that's selling online will have sort of throughout different parts of the organization, from operations to your product offering? Two Sales? Yeah, I think the biggest mistake you can make when you're thinking about e commerce is just viewing it as another sales channel. To me like it. I mean you could take that, but it's a pretty limited view of what it is. You know, if you're thinking of it as a business, that you can make it easier for your current customers to transact online. Well, that's like, you know, very you're not taking advantage of everything at you're about to be able to do and for me, like looking at it, it's a very e commerce is much more of an operational product line. There are other decisions that need to be made than just having a conversation with your salespeople saying hey, you know, we're bringing the sea commerce channel in and just may impact your your commissions. You know, it's it's a much more of like what not new products can we offer? What were we not able to offer before? How is a business? Are we able to operate in terms of that? What is inventory look like? You know? So it's a much larger complex element, I think. and to be really successful. And I didn't get into marketing yet. I mean obviously your marketing is going to change, you know. So it's a it becomes much more digital. So it is definitely a bigger than just this is our new sales channel. I mean you could view it that way, but I think, you know, if you really want to take it and embrace it, it's a much larger complete picture of the business. So yeah, I imagine that, you know, in a lot of organizations this idea of the commerce and selling online is intimidating to the sales force inside that organization because they they probably feel a little threatened. Like I think of if you're a fan of the office, anybody listening? I think back to like the early seasons when they they implemented their they're like Dunder Mifflin online portal and and everybody was, you know, freaked out. The whole sales team was freaking out that they're hit. Their sales commission was be gone. They're being replaced by a computer. But but I think that, you know, that episode was probably done because there's some truth to it. I'm sure people even today see that we're as opposed to thinking, okay, what opportunity is there now, like... said it a minute ago, right, what could we what are we able to offer now that maybe we weren't able to in the future, in the past? I think there's definitely opportunity and I think that's something where it you know, you have to have a more kind of complete conversation with the the sales team because if you do bring an interest as as another sales channel, it does turn into this competition. But if you are able to offer these new product lines, it creates new opportunity then for the sales people to get further reach into these businesses. And if you view e commerce as more ava like complimentary ecosystem, almost that like you kind of reside in and the sales is also a part of that, the further accelerated into the business I think you really start can change the way the organization thinks about it. We're as a as a salesperson. It's less of a threat and more of an opportunity. And I think if you're not thinking that way, you know, even as a salesperson, if you like, it's this is a threat. That's a very shortsighted thought, because this is coming, whether it's your business or not. And so, you know, it's like you're Gett you know you're going to have to face this reality one way or the other and you may as well be in a world where you can grow with it instead of trying to fight this wave that's about just destroy you. So it's like it's like any other type of technology. Be like somebody in the early nineteen hundreds, you know, fighting the coming of the car because they they're convinced they're going to be able to, you know, have a horse in course, yeah, my horse and buggies great, but yeah, I mean it's really not. It's really not so different like this is here. You know, I think it's interesting too, because I like a lot of the we work with, with midsize manufacturers. A lot of them sell very complex custom you know, big ticket items through long sales cycles and it's, you know, things like that, I imagine, are not in a lot of ways aren't maybe moving to e commerce, but there's a component of most of their businesses where there are more standard items, there's, you know or like aftermarket parts, for example, or things that are complementary to maybe the bigger ticket item, and I see those opportunities being missed already by a lot of businesses or they're just not sure what to do with it. Yeah, I think that's a really good point. And, you know, and not only just in terms of like other kind of these commodity replacement parts or whatever they may be, that you're you know, selling online, but even like the service element of it and just giving that digital footprint for your businesses and support and you know, content related to that. Yeah, it's yeah, I would totally agree. And Yeah, it's these longer, you know, year, year and half seal cycles. Huge, you know, pieces of equipment. Tough, but there's there's other elements of the business to where you can start exploring and, you know and also be getting reaching into some maybe some other businesses that you may not have before to then sell that larger seal cycle. So we're going to take a really quick break here to help pay the bills. So two thousand and twenty has been a weird year. Industries are facing new challenges as we navigate life without trade shows, events and in person meetings.

Many businesses are bolstering their online tools to offer a better experience. Will also making up for some of those missing trade show leads, and that's where cademist part solutions comes in. They help you create a dynamic, sharable cad catalog that you put on your website. Designers can preview your products from any angle and download and the format that they prefer. By improving the online experience, engineers and architects get the data they need for their design and you get a fresh lead in your marketing pipeline. Who Needs Trade shows anyway? To learn more, visit part Solutionscom leads be and you know, even even there, though, when you think about it like I mean, who would whould guess ten years ago that you'd be but buying and selling cars online, right? And and it's all funks, dogs, yeah, name it, I mean it's just give living creatures that are, you know, being sold. I mean. So if you think your product is not susceptible to ECOMMERCE, and going back to that BASOS quote, I think it is quite slowy. So it's okay. Well, let's see here. The one thing I wanted to ask you about was ECOMMERCE platforms. I'm just kind of curious like other softwares or platforms that that you really stand behind or think are worth looking at for anybody here who's listening and thinking about moving into ecommerce. Yeah, I think there's a lot and I could just like list them. But you know, I think for a business, and I will mention sometime, as we talked, but before even kind of getting stuck in like a you know, with talking to some like as a salesperson of a platform, I think there's really has to be like a lot of internal conversations before that even moves forward because, again, going back to that you know sales, you know what are we, what are we going to be, and before you kind of get stuck in a sales pitch and just trying to compare platforms, I think you really as an organization, you'd have that strategic understanding of, you know, how we will move forward and how we are going to address I mean there's gonna be challenges, there's going to be operational challenges, people challenge I mean, you name it, but you know where is that united front. You know what is the end goal of this? It's not just to get on a platform, but it's to change this business. And but yeah, it's you're seeing big companies, adobe, buying the Gento, I'm a gentle's, a big ECOMMERCE platform. So so you're seeing like more and more resources come in and when the money starts flowing into these businesses in these platforms, it just can become easier more for other businesses to get on it. And again, so, just from a competitor's perspective, yeah, you're going to face challenges if you're not considering it and thinking about those platforms. Well, while you brought up this, this topic of challenge is, like what are some of these you know, potential road blocks or hurdles that you might see a manufacturers that are running into as they start thinking about implementing and I just think, if I think the really goes down, like sales channels probably the biggest. If you start thinking about how a manufacture cells, then you start thinking about the like from manufacturer to a distributor, you know, to you know, sometimes there's even an agent in between that agent and the distributor, and then you know the qualifications, are games that are played between the distributor and...

...the manufacture in terms of sales rebates, you name it. You know, all of that creates complexities and challenges and risks to the business of changing. So you know that is obviously a really big thing. And then just people, you know, because you're gonna start sticking your resources into different things when you start moving to commerce, and I mentioned marketing before. You know, marketing becomes much more of a digital presence instead of a you know, Billboard, magazine, you name it, wherever you're going. So there's benefits there and you're going to start realizing there's organic opportunities of marketing to and it's not just hey, I got to pay a dollar to get this return. You know, you can start writing really good, fresh contact and content and it's not even still adding headcount. You know you can use leverage freelancers, you can leverage just, you know, your own customers, you know for testimonials, you name it, and you know you do this brain don't problem anything, but it's just all of that starts, you know, adding, you know, collateral or value to the business. You know through backlinks and everything that you know these manufacturers probably aren't even aware of in terms of what opportunity there are. But it's it adds real value for a longer period of time than you know throwing up a billboarder put a magazine add in the February two thousand and twenty addition. So yeah, I think that's really good point and it is something that you know. It's kind of an in my world here, but you're building equity in your rand when you can shift your marketing approach to a line with your ecommerce strategy, like you said it, you create a piece of content. I mean some of my clients not necessarily in the e commerce world, but it's content that they produce five, six years ago that are still generating qualified opportunities for them every week. And you know, as opposed to I always talk about this, this concept I think. I think I stole this from Joe Politzi of the Content Marketing Institute, but this idea of renting versus owning real estate online, like you, when you create a piece of content and it gains authority and adds sort of authority to your business in the online space. But now you got visibility in the search engines that you can kind of you kind of own it until somebody starts doing a better job and and you're not paying for that anymore, when you're ranking first or second or third organically for some some problem or product or question that your ideal customers searching, as opposed to, like you said, running a billboard or a print ad or, you know, even trade shows, where it's sort of a one and done thing, like you stopped paying and your visibility goes away. So I like that mindset of shifting your whole, your company's whole mindset to being more digital. Yeah, is it's I mean I said there's challenges and it's and you like you said that. You know, for people looking at this it's like well, it sounds so overwhelming, it sounds stressful. It's really just talking to people and you know, I go back to like, you know, when I started my career, and you know, I sat and I spent a lot of time just talking to people that were very successful, that you know, not only just professionally but personally, you know, and how did they balance that? What did they do? And there was no sales pitch, it was just me learning and I think...'s a business operator, you know, for me, going into the to the professionals is something that is brand new. I no idea, you know, it's just I'm just trying to grow. And if you're a business operator and you've been business, growing a business for a long period of time, but now we're at this you know, precipice. You know especially have what I like of like what you know, this change, and I think you know going back to like that process of just having conversations and, you know, trying to learn and re understand your business. And it's not to say you can't change. You've created significant value, whether it's your your products, supply chain, your sales, your whatever, those assets are inside your business and they can still be leveraged to this and it was kind of like what you were suggesting, like, you know, when you a business maybe has these likings, Larry like items, you know, of moving those online. So it's just finding those opportunities. But I think really spending the time just to have those conversations, and that's why I mentioned to you about trying to avoid just going to any commerce platform and just right away getting caught the sales pitch. And then also you have this sales channel. Well, it's you know, really that deep down learning and understanding and reflection on your business yourself and like what you're trying to build. So I don't know, I think that's yeah, it's good add I mean, and that's that's probably kind of where it all needs to start. But as people who are listening here, you know, who are thinking, yeah, okay, I know, I've been thinking about this for a while, I need to I need to start moving toward ECOMMERCE, they're probably feeling some intimidation, probably have been for a while. Like what are some resources or where would you point people? Like how can people get started educating themselves about, you know, what are all the ways this is going to impact my business? Where do I even jump off? And I think, just to you know, you start looking at like competitors, you start looking at your supply chain, you start looking at doesnestique companies that you do business with. I may do this well. And then, yeah, you just reach out and you start having conversations. I mean me, you know, I talk to people about this. You know, it's you know, that's not something that is unnatural for people to have these conversations and the talk. People want to help other people and there are resources online, but again, I think it's you know, when you're not getting that two way feedback and that reflection, you know, it's just just like if it's turns more into a sales pitch or some type of video that just thrown at you, you're not really going to get that complete. It's simple conversations with people. And you know there's other you know, I'm sure, consultants and stuff that work on this that aren't necessarily like representing a single product, but that may help. But I think kind of getting in and having conversations with people that are like operators and that have done it before, I think it is probably where you're gonna get the most bang for your buck because they're going to kind of understand some of the challenges that you're directly going to be facing that maybe someone that's just you know, consultant, you know, may not see sometimes. HMM, yeah, that's a good point.

So it's start with your network, is look at WHO's done it, who's maybe had some success or probably stumbled along the way too, I'm sure, and just start to sort of learning that way. Huh, yeah, I talking to people like they said that. I'm sure the people that have it's created seals channel. They you may hear from them. Well, this is you know, it's just a it's just a sales channel shift. It's not that great. And then you're like, okay, well, you know, I heard from Cavin. He was saying, you know, that's a potential, you know, thing that could happen. You know, you start building and building a story in a narrative and seeing the pros and the cons of it all. So that's good will. Ken. Anything else you'd like to add to this conversation that we haven't touched on that you think would be helpful to listeners? No, I just think it's an exciting time and I think people, you know, for businesses to really kind of adapt and to grab hold of this. It's not too late, you know, and I think sometimes people think it is too like oh anas on their huge well, no, I guess it's there's this this pie is growing, you know, and so it's the pie that you're currently and is shrinking. The other pie is growing. So you know, even if you're doing it poorly, you know, maybe you can continue to cross. So it's there's plenty of opportunities still there. It's not too late and you just don't want to be, you know, five, ten years now having this conversation, and then you probably will be too late. So get out ahead of it while you can. Write. Yeah, exactly, with great what's yeah, what'll rose pleasure. Really enjoyed this. Yeah, thanks for coming on. Man, this is really great. Appreciate you sharing your wisdom and experiences from, you know, from your own, I guess, everything you've gone through and in this ecommerce world. So well, thanks. So what's what's the best way for somebody to get in touch with you if they maybe like to learn a little bit more? You have your brain a little yeah, sure, you can hit me up on Linkedin. That's fine. That's probably the best way. You know, Kevin Harror, you know I think that's probably a best way to get after me. So right, and it's Kevin Har Jaaar. So check out Kevin on Linkedin. Awesome. Well, I would like to say thank you once again to our sponsor, codinus part solutions, for helping making helping to make this episode possible, and Kevin Thanks again for taking the time to join me today. Thanks. Show really enjoyed it. As for the rest of you, I hope to catch you on the next episode of the Manufacturing Executive you've been listening to the manufacturing executive podcast. To ensure that you never miss an episode, subscribe to the show in your favorite podcast player. If you'd like to learn more about industrial marketing and sales strategy, you'll find an ever expanding collection of articles, videos, guides and tools specifically for betb manufacturers at Gorilla Seventy sixcom learn thank you so much for listening. Until next time,.

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