OEM and Accessories over the Web?

Dec. 01, 1999 By Matthew Baynard

In a previous article, "E-commerce - Dropping cash over the web", I discussed how e-commerce, electronic business over the web, has brought about changes to the sport of snowmobiling. Due to the length, I was not able to discuss any of the sites that have helped precipitate this change and how their significance symbolizes things to come.

After looking at so many sites, they all started to look alike. Most were poorly done and lacked user friendly searching and buying options. To test the sites, I had test buyers order almost 40 items from multiple sites to let me know how the experience was. We returned most of the items to evaluate their return policies. None covered the return shipping costs. Internet businesses show their true colors when you return merchandise. When I mentioned reverse logistics in, "E-commerce - Dropping cash over the web", I should have pointed out that most Internet business just don't want returns. The advice here is be sure what you want, before you buy.

I did find two sites that passed all the tests, had great reputations, and fit what I was looking for as e-commerce examples. Both of these sites are doing it right and will continue to grow with the Internet. One is new to the industry and is just getting an Internet business running. The site is small, tasteful, to the point, and growing at a phenomenal rate. The second site is from and established dealer who wanted to expand on the web and capture a market that no one has exploited. This site is much larger; more sophisticated with search engines, electronic ordering, and value-added information. Both of the sites are unique and worth a detailed discussion.

Let's start small; I looked at Snow Etc. (www.snowetc.com), owned by Brian Berry. He represents the guy who just hated retail prices, so he started a business for himself and a few friends. He started out slow, but now he's doing enough business to make the local and remote dealers nervous. His site isn't fancy, but he provides products at a low margin due to minimal overhead. Will he grow to the big leagues and become an etoys.com? Probably not. But does he need to? Probably not. ISP fees, tons of employees and inventory, would all hurt that great low price and his enjoyment of a successful small business. Besides, his growth has been tremendous in the last two years.

Brian rarely touches merchandise, rather he drop ships from the distributors directly saving time and limiting how much floor space he needs. I could mention a hundred others like Brain, but the theme is the same and he has distinguished himself as a small outstanding web reseller. Keep it lean and mean and offer the lowest possible price is the reoccurring theme among the small guys. Just remember, not all of these guys are created equal. Buy based on reputation and past dealings since the small operations are sometimes operating on too thin a margin and close down with your cash in-hand. If the price is too low, it's probably not a viable web seller or the products are possibly damaged returns.

Sites like Snow Etc. offer some of the best price advantages to the savvy Internet shopper, but can offer some of the biggest risks. If the seller can't accept a credit card, go elsewhere immediately. This is your protection if a problem does occur since the credit card companies can step in on your behalf. If you paid by a check of any form, you're on your own. The Better Business Bureau (BBB) can only help locally, since remote claims are virtually impossible to resolve. Even the card won't help you if the guy closes over night and is long gone. A credit card is still the best method of net purchasing and the security, even in its most basic form, is adequate. Internet fraud involving credit cards is so small that I could not get statistical information from any agency. Compare that to phone based fraud and giving a card number over the net is pretty safe. For your information, credit card numbers are stolen at gas stations more than any other retail business. Additionally, local law enforcement is not apt to help you remotely unless you are defrauded financially over $10,000.

Moving up the scale to a true e-dealer is HLSM (www.hlsm.com), who went from being an established traditional dealer with a small web site, to one of the largest, not only for snowmobiles, but boats, motorcycles, ATV's, and PWCs, in less than 24 months. That is tremendous growth and the trend for Internet businesses that will make it. If you don't grow quickly in the world of e-commerce, you normally don't survive to get bigger. This site is owned by Nick Arnone, and he has really upped the ante since he sells directly to consumers while supplying other traditional dealers and web dealers too. Some of the small site actually buy from HLSM and operate with super thin margins. Unlike most sites, HLSM represents a pure e-commerce site, in that you can browse and purchase completely electronically.

This site is also a rarity in that enthusiasts have designed and run the site. You can tell this if you have to call them, and talk to a guy who has put studs in a track, installed pipes, or adjusted a carburetor before. You'll know exactly why this is important when you visit sites that are not functionally designed for the products they pitch. (e.g. hundreds of items in a list and you have to scroll for what you need since nothing has been organized by category, company, or function.) These sites may not be able to assist you either in the technical aspects or practical aspects of your purchase.

HLSM, like all sites with a large product offering, is struggling to keep accessory items up to date while continually adding new items. Look at a Dennis Kirk catalog and you can understand the complexity of keeping thousands of pictures, descriptions and prices current.

One item that I really liked about HLSM's site is they have manufacturer's OEM parts microfiche online. From my research, this is the only site on the web that provides this service along with the ability to purchase OEM parts electronically. I can look up the exact part of my Ski-Doo on microfiche, select it from a list, order it, and never have to deal with a parts clerk. With a sophisticated shipping and receiving department, HLSM is able to move the OEM parts in and out very efficiently, and with a price advantage over your traditional dealer. The below-retail pricing alone will have the most profound change to the current dealer structure.

The HLSM site is, in my professional and personal view, the wave of the future. Many will have great sites, but they will not be considered a 'virtual dealer.' As more dealers plan to go on the web or lose to those who have, you will see the model of HLSM repeated. Like all e-businesses, once a successful model is developed, it will be duplicated and duplicated in hopes of doing it better. Right now, HLSM is alone and changing the industry model of a dealer.

On an ending note, I can already see the e-mail from those I upset by not discussing their web site. The hard truth is that overwhelmingly, most of the snowmobiling sites are poor. A site does not have to be professionally done to be accurate, convenient, and tasteful. An e-business site does have to provide value, convenience, and sellable merchandise. I really hate going to a business site to hear a piped sled roaring out my speakers. Real professional if you surf at work. I know I'll also get slammed for not mentioning some of the real cool looking sites that just advertise hours and locations of a dealer. These sites are basically wasting disk and LAN bandwidth if your looking to buy on-line.

Thanks for the bandwidth.

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