The Dot-Com Revolution
Today we have the opportunity to find out, thanks to some creative minds and the global expanse of the Internet. New dot-coms based on brick-and-mortar principles are promising to revolutionize the way the industry does business by putting a wealth of information and product selections at our fingertips.
What Resources Exist?Perhaps the most notable of these new companies is http://www.CeramicSources.com, the first self-described “fully transactional e-marketplace for the ceramic and glass industries.” The site was launched in July 2000 with the intention of transforming the way ceramic and glass materials, equipment and supplies are sourced and procured. Rather than spending hours researching numerous suppliers and types of materials and equipment, ceramic and glass manufacturers can now visit one website designed to do all the background work for them—and then some.
The company’s marketplace area is equipped with a proprietary request for quotes (RFQ) format, where buyers can dictate what product they’re looking for, how much of that product they need, when and where they want the product delivered and any additional requirements for that product. Buyers then specify a list of suppliers who will receive their RFQ, and those suppliers are given the opportunity to bid on that project. Within a specified period of time (usually several days), the suppliers send quotes to the potential buyer through e-mail or other means, and the buyer can select one or more suppliers to win the bid.
All this is done from the comfort of the buyer’s own office or home, without having to make dozens of phone calls or sort through piles of unnecessary information. Designed to meet specific industry needs and streamline transaction overheads, the site provides community members the means to reach a larger international audience and transact entirely online, as well as to easily research suppliers, find industry news, post classifieds and participate in subject-specific forums.
Members are given access to all of the website’s features—including a materials database, currency and unit measurement converters, news, events calendar, discussion forum, supplier directory, classifieds and other resource sections—at no charge. The only fees associated with the site are commissions based on the dollar amount of each confirmed sales transaction.
Suppliers can market and auction products and services to a community of qualified and interested buyers, respond to bid requests, automatically gather sales leads and distribute product information, and complete and settle transactions online. Buyers can submit requests for bids to any number of qualified suppliers and complete and share transactional information online. The company also handles shipping—through a database of over 60 different shippers, a product can be packaged and shipped according to their detailed criteria.
Through these options, suppliers gain access to an international community of potential buyers, and buyers gain a competitive edge by sourcing the best-suited materials and products at the most competitive prices in the market.
“Members have told us that they like the idea that they can be anywhere and still find suppliers and buyers all over the world without having to search them out themselves. They just post their RFQ and we do the rest. And because our site covers every geographic region, it serves as a central location where they can go to find all the products they need,” says Brad Nelson, the company’s executive vice president.
For those not quite ready to do their shopping online, several dot-com resources exist to provide a wealth of information specific to certain industry groups. For example, http://www.ThermalSource.com was launched in 1999 with the mission of assembling “the world’s most comprehensive database of heat processing industry information.” Founded by thermal process industry veteran Steve Mortensen, the company aims to provide a bridge between professionals needing highly specific expertise and those who can provide it. In addition to its extensive information database, the website provides powerful search tools to make it easy for industry professionals to find exactly what they’re looking for. Like CeramicSources.com, access to this information is free of charge.
Someone looking for a specific level of quality in their thermal processing suppliers can check out the site’s list of Superior Suppliers™—companies such as Kanthal, Keith Co., Inc., and Wyssmont Co., Inc., that have participated in an independent, proprietary performance evaluation that identifies the top reasons customers choose to do business with them, including factors like technical support, product quality, customization capability and engineering strength. The results of this evaluation are combined with detailed company information to help potential customers quickly identify suppliers with the technical and business strengths they need.
As part of its efforts to continually evolve to meet industry needs, Thermal Source launched a redesigned site in September 2000. The company constantly adds to its database of industry information, and also plans to add new utilities and information to the site on a regular basis. A web search engine with user-selectable filters is also in the works. “These tools will help you spend less time looking for industry information and more time using it to your advantage,” Mortensen says.
Another information-based site—Refractory One Source, or http://www.USA-ROS.com—was created in July 2000 specifically to serve the refractories industry. Member companies comprise refractory users and manufacturers such as JT Thorpe & Son, George Snyder Contracting, Empire Refractories, Zar-Tech, Resco Products Inc. and Thermal Ceramics, to name a few. To help each member company maximize its online growth potential, USA-ROS offers e-business solutions through what it calls “Strategic Business Partners”—companies that provide the industry with cutting edge online technologies. Some of these partners include P-Wave, a Reading, Pa.-based web enablement and e-commerce developer; and soon-to-be-added AIG Insurance, which offers a suite of online insurance services for business-to-business websites. These Strategic Business Partners provide content and commerce solutions that enable manufacturers and distributors to become more successful by reducing costs, improving customer and supplier services, and by extending their reach to new and existing markets. For example, USA-ROS’ partnership with P-Wave enables it to offer e-commerce packages ranging from a simple online product catalog with ordering forms, a shopping cart, and single level pricing, to higher end packages that include multilevel pricing, printable quotations, printable invoices and auxiliary documentation integrated into member companies’ accounting systems. Through USA-ROS, P-Wave built an e-commerce site for Zar-Tech, Inc., located in Newburyport, Mass., enabling Zar-Tech to become one of the first refractory-related businesses in the U.S. to distribute products through an e-commerce platform.
“The site maintains its objectivity because it is not owned by or a branch of any company that takes part in the manufacturing, installation or any aspect of the refractory industry,” says Todd Lobaugh, founder and president. “The site is independently owned and operated by people who have many years of experience within the refractory industry and care about its future online.”
The company’s immediate goal is to create daily tools that can be used by everyone involved in the refractory industry. These tools include a business directory for resourcing refractory related needs, product databases, evaluation of new products by well-known industry experts, news and product information updates, a lead generating major project board, an employment services board, an asset exchange inventory reduction board and an events calendar. USA-ROS also plans to continue its search for more Strategic Business Partners, like P-Wave, which will offer innovative, cutting edge products and services for the refractory industry.
Other ceramic-related websites are cropping up rapidly. Some the most impressive sites include http://www.Digitalfire.com and the related http://www.ceramicsearch.com, hosted by the software company Digitalfire Corp.; http://www.ClayStation.com, created specifically for the pottery industry; http://www.eceramicmachinery.com, which links buyers and sellers of used equipment through a large classifieds-type database; and http://www.Quadrem.com, which serves global mining, minerals and metals companies such as Imerys and Alcan.
Recognizing the growing importance of the Internet to the ceramic industry, some suppliers, such as Paragon Industries (http://www.ParagonWeb.com), R.T. Vanderbilt (http://www.rtvanderbilt.com) and the Orton Ceramic Foundation (http://www.ortonceramic.com) are also beginning to source their products online independently. However, despite the speed, convenience and ease of using the Internet, making money through a website remains an elusive goal, and most companies continue to use their corporate websites in a support capacity only.
Can I Trust The Internet?Despite the growing popularity of websites and Internet resources, many in the ceramic industry are still reluctant to use the Internet for anything other than anonymous information gathering. For some, slow computer and Internet equipment makes online access cumbersome, while for others Internet interaction is simply a risky venture with unknown consequences. Providing data to a nameless, faceless machine can be an intimidating prospect. But most of the ceramic-related websites are careful to provide a human element behind their machine-based services.
“Customer service is the one area that I have often disliked about doing business online,” says Dan Kim, director of communications for CeramicSource.com. “If you have a problem, it’s easy to feel like you’re sending an e-mail off into a void. Many of us have had an experience where we’ve never heard back from anybody, or we’ve gotten a generic, canned response that doesn’t really apply to our question. That tends to make people distrust Internet transactions as a whole. But our goal is to do things differently. We make it a priority to make sure we have a face, a voice, a personality behind what you see on your computer screen.”
Many online companies are also working to integrate a number of safety and security features into their sites that are designed to allay any fears that someone might have about doing business on the Internet. For instance, CeramicSources.com will soon be launching a “new and improved site” specifically to make e-procurement faster, easier and more user-friendly. The new site will feature Digital Credit Certificates, developed in conjunction with another website, whereby visitors can instantly see how much a company is able to purchase and how credible the company is as a business. It will also offer a “My Sources” page, where visitors can centralize their account activity, e-mails and all of their favorite news and information into a customized page; a “Supplier Folder,” where visitors can store a list of their favorite suppliers so that they don’t have to continuously search each time; and a “Message Center,” a Web-based e-mail service that will enable members to get in touch with a supplier or a buyer right from the site. The Message Center will also track negotiations, enabling a visitor to easily see their personal transaction history with every single buyer or supplier.
The bottom line is that these companies view customer service as their main priority. “We realize that we need to be interactive on a personal level,” says Kim. “We have a customer service staff that will contact members personally to answer any questions, or walk them through any part of the process that they’re not familiar with. If we receive an e-mail, we respond at least by the next business day, and we usually handle all phone calls on the spot. Our site also features a live chat feature if customers are looking for immediate help while they’re online.”
And for those companies that are still not convinced and are afraid they might lose out on a bad deal, a little insurance is also part of the bargain. “If something goes wrong with a transaction done through our site, we’re able to insure that transaction up to 85% of the total value,” says Kim.
What Lies Ahead?Each day, dozens of new dot-com companies chase the pot of gold at the end of the Internet rainbow, while dozens more fall unsuccessfully by the wayside. Suppliers looking to expand their marketing outreach, and manufacturers hoping to facilitate the purchase of necessary materials, equipment and services, are still, for the most part, watching warily from the wings.
The online marketplace is still new, and many unknowns exist. For now, consumables such as raw materials and replacement parts are a more likely candidate for web purchasers than capital-intensive equipment, which generally has a lengthy purchasing cycle, may require custom solutions, and typically goes through many layers of management before approval. But it’s hard to argue against an entity that enables easy access to an abundance of information and a global network of suppliers that compete in both quality and price.
“E-procurement eliminates geographic boundaries as a barrier to the way people do business,” says Kim. “This is especially important in ceramics because it’s an industry that’s spread out all over the world with so many different specialties. By doing business online, companies are able to keep their costs down while increasing their market share at the same time.”