E-commerce has completely changed how and where people buy things and the expectations people have when making a purchase. As a result, equipment OEMs and dealers are worried about how they can compete in light of Amazon’s success and the company’s ever-increasing shipping and customer service efficiencies targeted to their same customers.
For a long time, traditional retail categories like clothes, entertainment, and home products have been the focus of competitive worries regarding Amazon’s expansion. But heavy equipment OEM’s and dealers are taking notice as the e-commerce behemoth enters new areas, such as its well-reported move into the car aftermarket parts business.
Amazon’s growth rate is still astounding. Despite supply chain bottlenecks, increased labor expenses, and the ongoing epidemic, the eCommerce behemoth is operating at full capacity. After its earnings release, the stock of this $1.4 trillion company surged by more than 14%.
Original equipment manufacturers and wholesalers alike are in a dilemma as Amazon’s expanding influence continues to reshape the face of American industry. They must decide whether to pay money to join Amazon and support visibility or fly solo and risk falling behind.
Industrial and manufacturing enterprises need to evaluate their existing e-commerce strategy if they want to thrive against Amazon and other e-commerce behemoths. While many OEM organizations lack the time and resources to give consistent, up-to-date data to a wide range of suppliers, many small- and mid-size distribution companies are unable to compete with household names like Grainger and MSC.
Manufacturers can, however, develop the differentiation required to compete with Amazon and improve financial performance and customer satisfaction by reevaluating their current business practices.
Let’s look at a few strategies that can help OEMs win against E-Commerce giants.
Strategies And Ways For OEMs To Compete With E-Commerce Giants
Robust Functionalities Can Help You Cruise That Miracle Mile
Equipment manufacturers can easily boost their organizations’ productivity with careful development and evaluation of ERP and other back-end business capabilities. OEMs need to concentrate on client services like open shipping, prompt delivery, and a user-friendly experience. The customer should be able to place orders online anytime that suits their demands.
Manufacturers AND dealers can enhance their offerings and focus on building their brands rather than merely taking orders. Ecommerce platforms also take away the chance of mistakes and lengthen order delays during busy times. Improving these functionalities can give OEMs the edge they require to tackle the challenges presented by E-Commerce giants.
Shopify is perhaps the best example of helping the small to medium sized companies compete with Amazon. If you build a robust storefront, optimize the product pages with SEO friendly product descriptions, images and videos, you, too, can compete and win in today’s ecommerce world.
A Little More Personable, A Little More Human
Make sure your clients and staff are aware of your commitment to the process and your firm’s values. Regardless of how little or unimportant a company may appear compared to Amazon, people want to feel like their business matters.
Utilize social media as a platform to engage with customers individually, provide them with coupons for discounts, send individualized newsletters, or follow up with them after a transaction. Install custom recommendation engines that recommend other items they may consider. If nothing else, simply respond to their correspondence. In the modern era, a few minutes of human interaction may go a long way and help your company stand out from the crowd.
You don’t have to fight with the eCommerce behemoths in this market because their competition is mostly based on scale and numbers. Instead, focus on offering customers value rather than directly competing with Amazon or eBay. Whether it’s customer service, customized packaging, seasonal or local specials or special offers on new items for your most devoted consumers, compete where you have an advantage.
By addressing the voids in their businesses, you can compete. OEMs and distributors must serve the vacuum that Amazon and other E-Commerce giants lack.
Service Parts Pricing Is In The Spotlights
It might seem obvious that maximizing revenue, earnings, and demand requires selling a service component for the best price. However, many sizable, international manufacturers still price their parts manually and with basic tools like spreadsheets. These producers must stick with archaic pricing techniques like cost-plus rather than more advanced, value-based algorithms. Manual approaches will make optimizing prices extremely harder as competition from businesses like Amazon and customer demands rise.
The best dynamic pricing is determined by combining real-time data from various sources, including customers, rivals, IoT platforms, and other legacy systems. This dynamic pricing model ensures that the end-user has a positive experience while the manufacturer increases revenue and margins. Manufacturers’ pricing requirements will change as they develop a more proactive, connected service model.
OEMs must therefore invest in pricing solutions with adaptable architectures like cloud computing solutions that can grow and change with them as their needs do. The complexity involved in pricing service contracts and subscriptions for manufacturers in the future will be too much for manual systems to handle and the current solutions are easy to implement and use compared to even a year ago.
More Shipment Variability, Accounts For Better Size, And Increased Speed
According to the latest report on Global Equipment Aftermarket Trends from the newswire, The size of the equipment market is anticipated to increase by $3,220.15 billion from 2021 to 2022, representing a 10.3 percent compound annual growth rate (CAGR). However, with this expansion comes a new problem: the nature of shipments is becoming more unpredictable.
The majority of the time in the past, distributors received significant shipments of parts from OEMs and aftermarket vendors. The logistics of getting those parts to their destinations were managed by distributors. Repair components, however, are now playing a bigger role in your business since most equipment is kept on the road for longer periods of time. This entails more paperwork, more shipping, and increased pressure to control costs.
For distributors and dealers in significant markets, you will find and gravitate to any solution that allows you to ship easily and quickly. Today, logistics are global: service facilities, fleet and asset managers, inspectors and technicians. Thus OEMs and aftermarket suppliers also need to transport smaller quantities of parts (or hundreds of them), which takes time and money to manage. There is a better, faster way forward today.
For example, the equipment might be down and in need of a quick fix, waiting on components to arrive. These kinds of shipments are time-sensitive. Express parcel shipments will consequently become a more vital component of your shipping operation as a result of the inherent urgency and requirement for speed.
It is no secret that e-commerce behemoths like Amazon and eBay have achieved amazing success. This is because every part of their business operations is approached strategically, and their business strategy is incredibly user-centric.
OEMs and manufacturers can implement these techniques with the correct technology, professional advice, and a little direction. All you need is the courage to adapt to new technology and a steadfast dedication to providing clients with the greatest possible e-commerce experience.
About EquipmentFX Services
The services we provide have changed throughout time to fit the specific demands of each client. To truly grasp the gaps and potential, we like to start with our in-house A3 assessment. From there, we can talk about further services that we can create together.
We frequently receive requests and queries to “simply do this stuff for us” or “we have marketing folks, how can we make them and our procedures more efficient” after assessments. And other times, all we do is present the road plan and offer assistance as required.
At the conclusion of any engagement, you will have a formal framework and internal audit procedure to use to either improve your program or design a new program from the beginning in order to acquire more new clients and increase sales to existing ones.
To find out more about the EquipmentFX A3 assessment, digital marketing, or technology consulting services, please contact us.