Manufacturers are perplexed about B2B selling. To sell on the Net or not is the new dilemma they are facing today. Most manufacturers see the Net as a threat that could overturn their assiduously-nurtured network of distributors and dealers.

The dilemma is if you do not sell your products directly over the Net, prospects are sure to move over to your competitors who do trading on the Net. On the other hand, if you sell directly over the Net, you face the unpleasant prospect of your distributors and dealers deserting you and deciding to carry products from those manufacturers who do not compete with them.

This precisely is the B2B dilemma. Manufacturers who can ship products which can be assembled easily by end-users are tempted to sell on the Net. But, the question is how to deal with the B2B dilemma? Slowly but surely, manufacturers are discovering how to overcome the dilemma.

The four options
One, they can carry product information on the Net without prices. They need not sell their products directly over the Web, instead help their prospective customers find a dealer located nearby.

Two, they can sell products directly over the Web without discounts and direct prospective customers to the nearest dealer. Three, they can sell their products directly over the Web along with offering their salesmen commission on products sold in their respective territories.

Finally, they can sell their products directly over the Web for what the market will bear. Each of these approaches has its own merits and demerits. Choosing a particular approach would depend on the nature of the business and the products offered for sale.

Info without price
Consider the first approach of displaying product information on the Net without prices. This approach involves only providing product information on the Net and not selling. Why are manufacturers toying with this idea? For quite a few reasons. Statistics available prove that currently less than one per cent of retail sales happens over the Net. This is too small a sale volume to endanger relationships with distributors and dealers.

The risk is so great that most manufacturers do not want to sell on the Net and are happy with just providing product information on the Net. They are happy with their extensive distribution system both at home and overseas. Fear is another factor that is goading manufacturers to use the Net only for displaying product information. Many corporate executives, even those from reputed companies, are not computer-literate.

They are distrustful and fearful of computer solutions, thanks to the fact that they have been successful in using traditional sales methods. Complaints about dealers undercutting competition have also been responsible for aversion to sell on the Net. That is why this only-information-no-sale approach is popular. Consider the case of Little Giant Ladders, which manufactures adjustable and configurable ladders. Little Giant Ladders only provides product information on their website ladders.com and does not sell directly. They refer site-visitors to their dealers placed throughout the United States. Not just that, they even discourage their dealers to quote prices on the Web.

Sans discount
Move on to the second approach of selling directly over the Net without a discount. This is an attractive option with many manufacturers. Consider the case of The Wizard’s Cauldron (wizardscauldron.com), which manufactures sauces and condiments.

The Wizard’s Cauldron sells mainly to a scattering of health food stores spread across the USA. In a bid to improve product awareness, The Wizard’s Cauldron decided to sell directly on the Web, passing shipping expenses on to their Net customers.

This way they don’t compete with other stores on price and yet are able to get their products out there. Quite a few publishers adopt this approach. Both Simon & Schuster and John Wiley & Sons offer books for sale on their sites at retail prices plus shipping and handling charges. Thus, it has been possible for them to keep away from competition from both traditional full-price retailers and online discount retailers.

Paying commission
Selling directly while paying commission is the third approach in doing business through B2B sites. Consider the case of IBM. The company is experimenting with various forms of direct sales. Currently, IBM pays its sales force commission on all sales closed in their territories, irrespective of whether a sale was made over the Web or not. IBM is also developing a TeamPlayer program where resellers can register their customers with the company. Once the registration is through, IBM markets and pays the resellers a fee whenever a customer makes an online purchase. However, this form of direct sales is expensive and may be useful only for high ticket and high mark-up items. The redeeming feature of this approach is that it helps to keep both the sales personnel and resellers happy.

Market-driven sales
Selling directly at market price is the final alternative. This approach involves selling at a discount in direct competition with distributors and dealers. Margins are attractive here. But, this approach appeals only to those manufacturers who have little or no distribution chain to risk.

In sum then, whatever the approach one thing is clear, it is high time that manufacturers balance the conflicting pressures of price competition, need for product awareness and accessibility and maintenance of a traditional distribution network for bulk of their sales.