E-Commerce Commission Press Kit

For instance, a plastics commodity specialist at a large manufacturer can sit down at his PC, clickon a Web browser and search for suppliers selling industrial plastics online. A small supplier witha limited sales force can now reach that buyer, getting its first introduction online. Similarly, avendor’s sales force may not be able to reach the millions of home offices and small offices aroundthe country. By having an online presence and creating customized services for the small businessmarket, that vendor may develop a new, lucrative market, both within the U.S. and globally.Companies using the Internet to sell products find that they attract new customers. For example,eighty percent of the consumers and half of the small businesses who purchased from Dell’s Website had never purchased from Dell before. One out of four say that if not for the Web site, theywould not have made the purchase. And, their average purchase value is higher than Dell’stypical customer.W.W. Grainger, the leading distributor of MRO supplies in North America, describes similarresults. The company launched its Web business in the spring of 1995. Today, more than 30percent of the company’s online sales are to new customers or incremental sales to existingcustomers. Because the virtual store is open seven days a week, 24 hours a day, customers whowouldn’t otherwise be able to order from a Grainger store are now able to do so. In fact, morethan 50 percent of all orders are placed after 5 PM and before 7 AM when the local store isclosed.THE FUTUREBusinesses that use the Internet to buy, sell, distribute and maintain products and services arerealizing significant cost savings and increased sales opportunities. And, the benefits only increaseas the network of businesses conducting electronic commerce grows.Investments are already taking place to realize the $300 billion in business-to-business Internetcommerce analysts predict by 2002. 52 Three of the companies discussed in this chapter—Cisco,Dell and General Electric—were responsible for about $3 billion in Internet commerce in 1997. Iftheir current projections prove accurate, these three companies alone will conduct more than $17billion in Internet commerce within three to five years. 53 The experiences of these and othercompanies are quickly spreading through the rest of U.S. industry through conferences andconsulting firms who assist companies to design and implement Internet-based business solutions.Even at $300 billion, Internet commerce will only represent 3 percent of total GDP. 54 This meansthat the greater efficiencies companies are experiencing from electronic commerce are likely tocontinue to diffuse through the U.S. economy for decades to come.Meeting legal and technical hurdlesBusinesses have raised three potential inhibitors to the widespread adoption of Internetcommerce: the lack of a predictable legal environment, concerns that governments will overtaxthe Internet, and uncertainty about the Internet’s performance, reliability and security.21