Today was the day to get some home automation projects wrapped up. There is a lot to write about on the subject of home automation, but that will be for another day. This story is about the impact of the Internet on manufacturing and distribution. Completion of the home automation project required a very special cable — DB9 Serial with some wiring modifications on one end and RJ-11 on the other end. The cable is not the center of the story (for those interested in details about the cable, click here). The story is about how to procure this arcane cable. I was going to go to Radio Shack, buy a blank DB9 connector and make the cable myself but when I realized how long it would take to get to the store, do the splicing, test it out, and probably do some re-work, I decided to look on the web and see if I could find the cable and get overnight delivery.
A Google search turned up only a few places that had the Home Automation Incorporated 21A05 cable. I first went to smarthome.com — the logical place because they are the largest distributor of HAI products. I used their site search and tried various permutations of the part number to no avail. There are a number of challenges with the smarthome site but that is another story. I found the cable at the Worthington Distributors website for $5.62. This certainly reaffirmed my decision not to drive 20 miles to Radio Shack and then begin a long project to make the cable. The Worthington web site was very effective but I wanted to see if they had the part in stock and if they had overnight delivery (when I get into projects, I don’t have the patience to wait days for a part). Since they had a prominent 800# on their homepage, I gave them a call.
Debbie answered the phone. It turns out that Debbie and her husband Richard own the company. I asked her if they had the cable available for overnight delivery. She asked where I lived. I said I was in Pennsylvania (my escape home). She asked where in Pennsylvania. I told her it was out in the middle of nowhere. When I told her exactly where, she said, "We are just five miles down the road”! A ten minute ride and I was at a large home in the woods next to the Coutts Blueberry Farm. Inside the former three-car garage and upstairs in the former kitchen were eighteen people taking orders on the phone (70%) and over the web (30%), packing boxes, and printing out UPS and FedEx labels. Here was a state-of-the-art multi-million dollar e-business out in the middle of nowhere in the Pocono Mountains of Pennsylvania.
This story highlights the major impact the Web is having on how business is being done and from where it is being done. The bottom line is that a successful distribution business has to have available bandwidth and be on the route of UPS and FedEx or Airborne. If you have that you can build a business wherever you can get the kind of employees you need or increasingly where you want to live.
The Internet, along with the amazing capabilities of FedEx and Airborne and UPS, is making distribution geo-independent just like TiVo has made TV watching time-independent. Manufacturers need to take note of this. Recently I was looking for a particular gadget. I found it at a Canadian website but the site did not offer it for sale. The homepage said “click here to get the number of our inside sales desk so we can give you the location of a dealer near you”. I really wanted this particular gadget so I called. I got a recording saying call back Monday to Friday between 9AM and 5 PM. I really wanted this gadget so I called the next day. A very nice woman told me, “sir, you don’t understand. We make things, we don’t sell things”. I said, “you are right, I don’t understand”. I gave her my zip code and she referred me to a dealer 90 miles from where I live. I suspect that the dealer didn’t sell online either or I would have found them in my Google search in the first place. Most manufacturers continue to not offer their products for sale and depend instead on dealers and distributors, many of whom are not modern-day e-businesses like Worthington.
Worthington Distribution puts there wholesale prices on their website. Richard acknowledged that some wholesale customers don’t like this because it exposes their costs and potentially enables an “end-customer” to go around them. Richard says that many of his wholesale customers are small businesses and they work on proposals at night and need 24×7 access to the pricing information. He chooses to satisfy them rather be protectionist and require a customer to "call for pricing". That is the attitude (Net Attitude) that will win out in the on demand e-business economy that is rapidly evolving.
