Manufacturing guy-at-large.

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Notes on Amazon Business and decisions in B2B ecommerce

Added on by Spencer Wright.

This week, while in Seattle, I had the pleasure of visiting Amazon and talking with some folks there about Amazon Business. To prep, I spent a bit of time reflecting on the B2B ecommerce world, and how the major players in it have approached & prioritized their efforts there. I've written about both Amazon and B2B ecommerce a bit before, but what's below clarifies my thoughts on their position in the ecosystem significantly.


To an outsider, Amazon has always struck me with two core messages:

  1. We are insanely customer focused.
  2. We have built a massively impressive logistical operation - the biggest of its kind, outside of China.

Also of note: Amazon has always seemed to target specific audiences in its external messaging. Most prominent to me are:

  • Consumers; people who would otherwise be shopping at Walmart or local retail stores. Basically everything on the website is directed towards this group.
  • Other retailers/competitors. This is a bit less immediately evident, but it’s my impression that Amazon’s willingness to talk openly about their fulfillment centers (one of which I toured last year) and the way they’re thinking about logistics & delivery (cf. drone delivery, rumors about a NYC store, etc) are intended specifically to scare off firms that might want to compete with Amazon’s retail business.
  • Google/Apple/Microsoft. This is specific to AWS, which has become increasingly in focus over the past year (but was always assumed to be huge).
  • Investors. The best example of this is the shareholder letter, which is always a good read. The core intent here seems (and I’ll admit that this is a half-baked theory at the moment) that investors should trust Amazon, because they’re a truly visionary company - like Apple and Google, NOT like some retailer that should be focusing on short term objectives.

What’s missing in the list above is business customers. I’ve bought plenty of business related stuff on Amazon, but it’s usually been from my personal account, and the shopping experience isn’t aware (or doesn’t care about) the context shift that I (presumably?) go through when I clock in and out. The “Recommendations for you” sections switch over, but it’s on a visit-by-visit basis. Amazon treats me as a person, and it simply recommends that I look at things that are similar to what I looked at recently. 

Now, I’m sure that plenty of businesses have Amazon accounts that are just for business purchases. I worked at one such business a few years ago, and again recently. In both of these cases, I got the impression that (and please, pardon the pseudo Christensen here) Amazon had trickled *up,* being used first at home (whether by the person in charge of purchasing, or someone who was bugging them to buy something) and then later at work. As a result, it always made sense that the Amazon product we used at work was the same as the one we were using at home. I was used to it, and it has gotten *so* easy to buy stuff for personal use there, and changing my mindset a bit to use Amazon for business stuff was really very easy.

The arrangement worked well. When I was running a prototyping shop, I made a *lot* of purchases from McMaster-Carr and MSC and Rutland. Those companies’ catalogs were tailored for the work we were doing, and they (especially McMaster) do *such* a good job of providing a consistent browsing, purchasing, and fulfillment experience, that once you get used to their system it’s hard to imagine life without it. But there were plenty of times where I used Amazon too, especially when it came to items that fell more on the “office supplies” end of the spectrum. Amazon’s search features are really good, and it’s great to have ratings sometimes as well. Amazon’s product discovery system is dramatically different from those of the industrial suppliers, and there are a lot of cases where I’ll hit the wall with one system and really just want a change of pace.

This is worth highlighting: 

  • McMaster-Carr’s search is very good, but their browse features are just *awesome.* This works because they’re basically a walled garden: McMaster curates their catalog well, and they do a really fantastic job collecting & displaying (consistent!) data about every product that they sell. 
  • Amazon is basically on the other side of the spectrum. Their catalog is enormous, but it’s full of stuff that comes from third parties, and is often really poorly documented. Plus there’s a lot of stuff that you can buy on Amazon that’s basically a joke (that 55 gallon drum of lube comes to mind). This is partly made up for by their review system, which is really helpful when you’re evaluating multiple products whose data doesn’t line up directly. But it also feels like a crapshoot sometimes, especially with decidedly consumer products (that three wolf shirt comes to mind). In the end, the Amazon shopping experience is definitely less consistent than McMaster’s - but then again, McMaster won’t sell you a 55 gallon drum of lube. (I’m being facetious, but the point is real. Amazon’s huge catalog is definitely a feature.)
  • The other industrial players are a mixed bag. None of them are as good about data keeping (or, consequently, browsing/filtering) as McMaster. None of their searches are as good as McMaster or Amazon, and none of their catalogs are as large, either. They make up for these shortcomings with depth: Uline does shipping, MSC and Rutland do tooling, etc. They have niches, and their capabilities within those niches make them incredibly valuable.

It’s also worth noting that these companies each take a different approach to knowing/caring who (or what type of entity) their customers are:

  • It’s implicit from McMaster’s site, but I’ve been told in person that they take it very seriously that they do *not* treat different customers differently whether they’re a business or an individual. The prices I see as some schmo on the street are the same prices I see if I’m an engineer at Lockheed Martin, and they don’t give quantity discounts either. They’ll even turn away large orders, and are in general happy to send customers to their suppliers if it’d make more sense to cut McMaster out of the transaction. 
  • A lot of the same could be said of Amazon, with the caveat that there’s a public perception that Amazon is constantly optimizing their pricing - definitely for time of year (supply and demand), but possibly also on a person-by-person basis. I have no way of knowing how much of this is true, and personally I wouldn’t find it offensive if it was. But it does strike me that Amazon takes the stance that “everyone sees the same site, but that ‘same site’ is one that’s constantly shifting depending on who you are and when you’re looking at it and what you looked at recently, and when we talk about the ‘same site’ we’re talking about something that might vary in layout, graphic design, product recommendations, pricing, and any other number of variables.”
  • Most of the industrial players, on the other hand, do kind of want to be selling to actual businesses. Some of them will go so far as requiring EINs or sales tax IDs (this is more common with suppliers that sell products at wholesale), but almost all of them will at least have the “business name” field be required.

If it’s not clear, I *like* these differences. I enjoy living in a world where companies put philosophical approaches to commerce up for debate, and let consumers decide which they prefer. The variety is good, and I find myself enjoying trying to use each to its most powerful effect. But the differences are worth noting, and it’s fun (and possibly useful) to project outward where each of these perspectives might lead in the future.

Tektronix's excellent online quote process

Added on by Spencer Wright.
The main site.

The main site.

As a B2B ecommerce research mini-project, I spent a few minutes on the Tektronix website yesterday to evaluate their customer service and ecommerce integration. Both are excellent; here's a quick rundown.

Phone support

For a company with a diverse, highly customizable product line - and an annual revenue (as of 2006, when they were acquired by Danaher) of $1B - Tek's willingness to let me get on the phone with someone ASAP is really commendable. They've got an 800 number right at the top of every page, and their (pretty decent) automated phone system picks up in one ring. The *first* option on their phone tree is to speak with a representative, and I was connected to an actual person just 3 rings later - a totally reasonable wait time.

The main product page.

The main product page.

Product pages

Like a lot of B2B sites, Tek does *not* provide live pricing on some of their product line. But for a wide range of product categories, they display the base list price, and a link to configure the product, right on the product page. This may not seem significant, but a shocking number of B2B sites still don't do this. Kudos to Tek for taking the lead.

A few additional product page features that I like:

  • Datasheet and manual have big links in a prime location
  • Models in the product line are listed clearly and include base pricing variations
  • They break out product info into four tabs at the bottom of the page:
    • Overview has basic specs
    • Probes & Accessories shows related parts
    • Service shows available warranty plans, with links directly to the datasheets (!) for those service products
    • Library tab drills down to show a *ton* of additional content, including case studies, tech docs, and videos
  • The 360* view feature is kinda cool
  • It's *really* easy to request a quote, but I don't feel like I'm being bullied about it
  • They have an "Industry Comparisons" page that talks directly about how their products stack up against the competition. As someone who is inevitably shopping around, this is *really* nice.
Quote generation page.

Quote generation page.

Quote generation page

Tek's "configure and quote" page is pretty good. It shows the base price right at the top, and allows me to add items listed below via checkboxes. Unfortunately, the total price is *not* displayed in real time, but I give them a pass on that. 

My only real criticism is that the options aren't hyperlinked to give more context, info, or supporting documents for those items. 

Quote request page.

Quote request page.

Quote request page

The design here is a bit uninspired, but that's okay. I can add comments to my quote request and confirm the quantity and details of the parts that I want a quote for. There's also (still) a prominently featured 800 number in case I need more help.

I'm a little concerned that I'm not going to get a quote quickly when I hit that "submit" button, but the overall layout and experience gives me enough confidence to go ahead anyway.

Quote request confirmation page

Order request confirmation page detail.

This is *really* encouraging. The confirmation page is almost exactly the same as the request page, except that Tek is now telling me that I'll be getting a quote by email within 15 minutes. I am a very happy person at this point.

I can't emphasize enough how great this is. I've asked them to tell me how much this equipment costs, and expect the bill to be well into five figures. I probably won't decide to go elsewhere within a quarter hour; nor am I likely to call/email/yell at them to follow up with my quote request. (I have literally done this in the past in similar circumstances. Some companies dump quote requests into black holes, and a followup call is necessary to move forward.)

The content of the email.

The email

Tek emailed me three minutes after I hit "submit quote." 

The email itself reiterates all the products I requested a quote for, which is really useful for searching my inbox later. 

Inside, there's a PDF of my quote, with a grand total just under $40k. 

I've got three quibbles here: First, I prefer to have a human being attached to my quote (all it says is buy@tek.com). Second, the payment terms field is blank - at the least, they should tell me to call them to talk about the options. Third, it's unclear what the shipping cost and terms are. They do show lead times on all the parts, but I'd love to know whether they're going to add on S&H at the end.

The followup

I got a call from a Tektronix customer care rep (who was *super* helpful) about a half hour after submitting the quote. This is *excellent* followup, and I genuinely appreciated her demeanor and helpfulness - even after I told her that I was mostly doing research :)

Smart: McMaster's minimal top level nav

Added on by Spencer Wright.

One of the most striking things about McMaster-Carr's website is the nearly nonexistent top level navigation. I thought I'd compare it with some similar sites for context.

McMaster-Carr

McMaster's top level navigation has six primary items:

  • Search
  • Contact
  • Bookmarks
  • Order History
  • Build Order
  • Log in/Authenticated "my account" dropdown

The Search bar has a dropdown that autopopulates results as the user enters text. The Contact, Bookmarks, Order History and Build Order links are just that - links. No dropdown/flyout, nothing.

The unauthenticated site has a small "Log in" dropdown at the top right that takes an email address. The authenticated site's account link drops down to show a "Log out" and a "Settings" link.

MSC

MSC has too much top level navigation to describe in detail here, but a few takeaways:

  • Two home links (one is the logo).
  • They have a "Special Offers" flyout that has 6 items in it.
  • They have a virtual paper catalog link with a large logo next to it.
  • They allow you to arrange product categories by four variables.
  • They only show half of their categories by default; users need to click to show the other half (or, as a second option, "View All Categories").
  • They have a 277x150 pixel advertisement on the right side of the page.

Amazon

My main beef with Amazon is their "Your Account" dropdown menu. Why do I - a visitor to the Amazon home page - need to know that "Manage Your Content and Devices" used to be called "Manage your Kindle"? 

Elsewhere, the "Shop by Department" dropdown has seventeen items in it - each with a flyout containing images and as many as nineteen sub-items.

Uline

Uline's homepage is straightforward and visually consistent. But they insist on separating their dropdown menus by "Products" (containing 34 subcategories) and "Uline Products," (26 subcategories) which as a customer seems totally arbitrary. 

Also, free offers? Really?

Grainger

My rule: If it's okay that your flyout/dropdown menu obscures a large block of content, then it probably isn't relevant. 

Grainger's site is uniquely complicated by the space devoted to its retail stores, but that's no excuse. Just take the top row. They've separated out "Sign in" and "Register now" (two mutually exclusive use cases), and have their marketing email signup (which I don't see why I'd want) right there too.

B2B sites

Added on by Spencer Wright.

I've spent some time over the past few weeks thinking about my favorite B2B ecommerce sites. Here are my current faves (in no particular order), and why.

Box

Box's "Business" page is an easy-access portal to a complete set of product features & use cases. While I tend to recoil a bit at talk of "product features and use cases," the way they display them here is attractive and convenient.

Caterpillar

Considering the breadth of Cat's product line, their main site is an exercise in simplicity. My primary complaint is their browse feature, which uses multi-layered dropdown menus.

Cat.png

Olympus

Olympus NDT's video gallery gives one-stop access to hours of content - covering the lion's share of their product line. Considering that many of these devices run into (and past) the tens of thousands of dollars, being able to see them in action is a nice feature. 

Olympus video gallery.png

Amazon

(I know they're primarily b2c, but whatever - *tons* of businesses buy tools on Amazon)

Amazon's "Improve Your Recommendations" helps users tailor the products that the site recommends them. For small businesses in particular, this feature can be really helpful in separating personal from business purchases.

Smart: McMaster-Carr's "delivery notification" feature

Added on by Spencer Wright.

A problem I've had in real life: I made an order from a supplier, and I know the day that it's going to arrive, but I won't be at the actual delivery location when it shows up. This could be because I'm on a jobsite, or there's a dedicated delivery location where I'm working, or maybe the UPS guy just always leaves things at my neighbor's house.

Well, McMaster-Carr seems to have noticed this, and they're now integrating their carriers' shipping & delivery info into their own delivery notification system. It's a great feature, and I got the chance to try it out the other day.

In this case, Zach was picking the package up in Southampton, and I was going to be in the city when it was delivered. He had asked for the tracking number from me but I (being lazy) never got it to him.

But I *had* put my cell phone number in the checkout dialog, and I got this great text message - which includes info on the parts I ordered - when it showed up. A quick screenshot & text to Zach, and he was able to grab it without any problem.

IMG_8128.png

This is a really, really great feature. By giving their customers access to delivery data on their own terms, McMaster makes the entire procurement process a lot easier.

McMaster-Carr and the Future of Parts

Added on by Spencer Wright.

Last year, I wrote a post describing my feature requirements for a modern parts management system. Re-reading it today, I realize that it doesn't really say what the user interaction would feel like - or how it would work at all. I hope to provide some of that here.

The key is this: Integrate small parts inventory management into the product design, prototyping, and maintenance, repair & operations processes. I'll treat these as three separate use cases, though they're all part of the same product lifecycle.

The reader will note that I believe McMaster-Carr to be the strongest positioned organization to take on these tasks. As a longtime fan of McMaster and a student of their intense customer focus, beautiful interface design, and impressive supply chain management, I hope that they seriously consider these recommendations - as I'm sure that their competitors will be soon.

Note: I diagrammed an early version of this idea in a flowchart here.

My current "system," during prototyping on  The Public Radio.

My current "system," during prototyping on The Public Radio.

During Design

As a hardware product designer, I want my suppliers' parts catalogs integrated into my design environment, so that I can seamlessly browse for new parts and view part data directly from my modeling software.

Autodesk Inventor is my go-to design software, and McMaster-Carr is my go-to parts supplier. I'm constantly browsing McM for a part, then adding it to an open order, then downloading the STEP file and importing that into my model. I consider this a luxury: McM's decision to include STEPs for the vast majority of their mechanical parts makes my job a ton easier. But the process is convoluted, and a lot of part data is lost. On parts like socket cap screws, for instance, McM tracks the following data:

  • Thread size
  • Length
  • Thread length
  • Material
  • Package quantity
  • Package price

But their STEP files contain none of that; all that's included is the part number and the material, which is often stripped of a lot of useful data (parts described as "Type 316 Stainless Steel" on McMaster's site often show up as either "Stainless" - or worse, "Generic" - in the STEP file).

For McMaster-Carr to become more fully integrated into my design and procurement process, they should include comprehensive part data in all of their STEP files. 

Moreover, there's a larger opportunity for McMaster to integrate their catalog directly into my design environment. If their catalog were available as a plugin for Inventor/Solidworks, designers could browse, design, and purchase all from one seamless interface - which I believe they will demand in the near future. Look at Plethora and Sunstone Circuits (and in web development, Squarespace) - across the hardware world, the movement is towards integrating design & supply chain management. McMaster-Carr is perfectly positioned to become a powerful player in the field. 

During Prototyping

As a prototyping mechanic, I want real-time internet enabled inventory management, so that I can understand what parts I have on hand & prepare for shortages before they happen.

Small parts management sucks. With their lightning-quick delivery and vast catalog, McMaster is the cornerstone of most prototyping shops' parts management system. But that solution is awkward at best, and often requires simply ordering more parts, even if we have some (somewhere) on hand. 

Small scale inventory management has historically been extremely difficult, but today it's increasingly easy. For instance, Quirky has shown us that it's not that hard to keep track of the number of eggs you have in your fridge, and Tesla's iOS app shows the charge state of your car's battery. It's only a matter of time before the same is the case with things throughout our physical lives, and McMaster-Carr is uniquely positioned to take small parts management on.

I envision a small parts cabinet full of sensors (some combination of force, optical, or proximity), which would periodically update an online database as to the quantity of parts inside each bin. But you needn't even start there. An easy MVP would be an iOS app that allowed the user to snap a photo of a small parts cabinet and tag each bin with a part number & quantity. The photos would be collected and stored online, and would be linked to the customer's McM order history. 

Then, when a mechanic takes a handful of bolts out of a drawer, all he needs to do is update the inventory count from his app. By tapping around a set of linked photos in the app, he's directed to the bin that he's physically looking at - and he can confirm visually that the parts are what they appear to be. By tapping on an "info" tab, he brings up the inventory data (including links to a 3D part file, technical data, order dates, and a list of mating parts/assemblies that the part has been used in - culled from the Inventor plugin described above) and assign a piece count to a job & edit quantity on hand in moments.

McMaster-Carr should build this system - starting with an iOS app that offers basic inventory management. Doing so would give them a view into their customers' usage data, and would help users streamline their restocking process. The days of bins labeled with bits of paper are numbered, and users will soon demand personalized (and internet-enabled) inventory management systems. McMaster is in a unique position in the marketplace, and has the opportunity - if they work now - to strengthen their foothold in small parts management.

For MRO

As a maintenance, repair & operations engineer, I want a single process that incorporates machine data, relevant spare parts, and procurement, so that I can get my facility back online more quickly.

A large part of McMaster-Carr's business is in supporting maintenance, repair & operations (MRO) professionals. These customers have unique needs; their ability to get the right part, right now, can have huge impacts on their company's ability to recover from unplanned downtime due to a broken machine.

In many cases, MRO engineers will find themselves with a broken part and will need to replace it immediately. Doing so will require careful measurement to determine the part's specifications, a process that can be difficult and imprecise - especially if the broken part has been mangled and/or lost.

McMaster should work to establish a system of folksonomy - user contributed data - that would allow MRO customers to tag parts with information about how and where they can be used. For instance, a particular serpentine belt might be commonly used as a replacement spindle drive belt on an old lathe. Instead of finding this data on the web - and then cross referencing part numbers back to the McMaster-Carr catalog - a tag could be submitted to the relevant part directly in the McM database. Subsequent users could then find the information they need right in the McM website/app.

Such a system would be complicated, for sure. It would require a significant effort on McM's part to hire and train community managers, who would monitor and vet user submitted data on a daily basis. But doing so would allow McMaster to leverage the huge - and growing - network of hardware professionals and enthusiasts. This community is sorely lacking a single go-to reference, and McMaster is in many ways the strongest candidate (with its enormous existing database of part, material & process data) to do so.


In order to pull off these tasks, I believe McMaster-Carr will need to become more transparent about their processes and inventory data. This will be a difficult process - I myself struggle with transparency - but I believe the payoff will be well worth it. A new generation of hardware professionals & hackers have come of age in a new information paradigm, and they are increasingly responsible for purchasing decisions in small and large companies alike. These people have grown up reading Amazon's shareholder letters and following the official Google tech blog. They expect to be part of a company's product development process, and will contribute their own time, energy, and expertise to projects that historically would have been developed in private. McMaster-Carr - with its huge network of enthusiastic users - should leverage that collective energy, and work with its customers to bring parts management into the 21st century.

A smart thing that McMaster-Carr does really well

Added on by Spencer Wright.

Commoditization of everything.

Tool selection is often a difficult process. Manufacturers are keyed on branding, and often use brand terminology to describe what may (or may not) be useful product features. As a customer, a lot of my efforts are spent trying to interpret this information, and cut through the terminology to get to a head-to-head comparison.

Most retailers repeat brand product descriptions verbatim, but McMaster-Carr does customers the service of stripping brand copy and providing only the relevant product features. They even go a step further, formatting those features consistently across product lines.

See the Amazon results for "nailer":

Amazon's results show four products. Customers can see the brand name, a large color photo, pricing, consumer (star) ratings, shipping availability, and one product feature/description.

McMaster, on the other hand, shows eight products (plus two accessories). Each product has nine features, a price, and a detailed description - including a wide range of associated products (mostly nails, in this case).

Amazon seems to think that what I really care about is the color of the tool and when it's available. McMaster gives me real product data, and their global shipping policies (which are a worth a thousand words unto themselves) give me all the information I need to make a timely decision. While Amazon focuses on brand language - both the manufacturers' (who needs the 9-digit alphanumeric part numbers?) and Amazon's ("Prime"; "#1 Best Seller"; "More Buying Choices") - McMaster focuses on what the tool actually does.

As a consumer, I want to comparison shop by technical product features, so that I can quickly find the right tool for the job.

Brands are beside the point. McMaster commoditizes products, reducing them to the features & methods they use to solve my problems.