Wholesalers Embrace Online Trading to Drive B2B Tyre Sales
Online ordering of tyres between wholesalers and their retail customers is undergoing a technology-driven revolution, which is improving business efficiency through time and cost savings. One dedicated IT system developed by Cam Systems is already on track to deal with one-in-five of all wholesale tyre sales by the end of the year. And the proportion of sales traded online will gather pace as more businesses get involved and new systems become available.
Cam Systems released its MIDaS Virtual Warehouse system into the market as long ago as 1996. It allows wholesalers to set up direct online trading links with customers for 24-7-365 stock, price and delivery enquiries and order placement. But the trigger for industry-wide use of the system came with easy access to broadband, offering speed and reliability of connection and data transfer.
Since the launch of a web-based version of MIDaS Virtual Warehouse in September 2004, use has rocketed by a staggering 400 per cent in terms of tyre volumes ordered through the system. Over the same period, there has been a 20-fold increase in customers using it.
The popularity of the system is demonstrated by figures which show that MIDaS provided the platform for the electronic ordering of more than 2.25 million tyres in 2006. If the forecast volume of up to 3 million in 2007 is realised, MIDaS transactions will be worth around £90 million or, put another way, 20 per cent of the UK wholesale market.
Cam Systems’ managing director, Mike Allen, believes wholesalers and retailers who switch to online ordering are experiencing huge benefits: “Wholesalers can dramatically reduce administration costs, especially in telesales, order processing, pricing and stock management. With MIDaS these functions are carried out in real time and with far more accuracy and consistency than can be achieved with manual systems.
“For retailers, it means faster ordering and delivery, up-to-the minute pricing information and better use of staff, who are freed from making and receiving endless phone calls to identify stock, price and delivery information,” says Mike.
While MIDaS Virtual Warehouse has been used by leading wholesalers for a number of years, the arrival of a nationally available broadband service in 2004 was the trigger for dramatic expansion. At its launch in the autumn of 2004, around 100 customers used the web-based program, placing orders running at an average of 45,000 units per month. Two years later, those figures had rocketed to more than 2,000 customers and 185,000 units.
Cam’s wholesaler customers market MIDaS Virtual Warehouse as their own branded service and are responsible for software installation and training with participating customers. The back end is then hosted and managed by Cam Systems with account access certificated ensuring the necessary confidentiality and security, allowing price and discount structures to be individually controlled and negotiated.
Prominent businesses including Micheldever Tyres, Tyrespot, North East Tyre & Exhaust, Tanvic Tyres, Broadway Tyres and other Group Tyre members, are successfully using the system to develop more efficient – and profitable – customer relationships.
The next big thing
With growing adoption of online trading in the B-2-B market, the next frontier is the expansion of businesses wanting to enter the B-2-C (business to consumer) arena. With high consumer confidence in e-shopping and the greater availability of mobile, fit-at-home services, there is a growing acceptance that online tyre retailing will be the next ‘Big Thing’.
“It’s a natural progression as far as I’m concerned,” says Cam’s Mike Allen. “We’ve already supplied successful B-2-C systems for two specialist retailers, but the opportunity is there for many more businesses to get involved. The consumer is already buying a vast amount of goods and services online, so the culture is well-established.”
But striking a cautionary note, he continues: “Selling tyres online is already a very competitive business with tight margins, so the efficiency of the IT system behind the retail website is vital in keeping administration and manual input to a minimum level,” says Allen.