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When applied to the web, I call this consolidation and distribution model
the "Mega Web Catalog". There are many benefits to Mega Web
Catalog consolidation and distribution model, many of them are exactly the
same benefits enjoyed by the Ingram consortium of suppliers and retailers;
however, there are other key benefits as well.
Under the current system, suppliers who wish to sell their goods online must
create their own web catalogs. As a result, they face all the problems
associated with publishing a web catalog including building and maintaining
the catalog, promoting their web catalog, and submitting their web catalog
to the various search engines. Still, current suppliers face the
reality that their web site may rarely be found, because they happen to be
just one of thousands of other web stores selling the same product. Under
the Mega Web Catalog model, the supplier does not need to create a web
presence. The supplier does not need to promote their web presence, the
supplier does not need to worry about being found on the web. This is
because their product data is sucked right out of their accounting system by
the Mega Web Catalog (through synchronization) and electronically
distributed to hundreds if not thousands of web portals around the world.
Here is an example:
Let us assume that Small Potato's, Inc. is a small Michigan-based
company that makes tiny, little shoes for babies. The company decides to
install Peachtree Complete Accounting software. During installation, the
Peachtree set up process asks the user "Do you want to sell your
products automatically through the Mega Web Catalog? The company indicates
yes, and fills out the appropriate application to become a Mega Web
Catalog supplier. As the set up process continues, the company places a
check mark in the appropriate box next to every product they wish to sell
over the internet through the Mega Web Catalog. Thereafter, at regular
intervals, Peachtree pushes the desired product data to a web-based
database (in much the same way that the Peachtree Web Accounting solution
currently works.) Also at regular intervals, the Mega Web Catalog polls
the Small Potato's product database on the web, extracts the product data
and pricing, and then synchronizes that updated information to the
hundreds or thousands of web portals that have chosen to resell the Small
Potato's shoe line. One such portal may be Amazon which marks up the Small
Potato's shoe line by 20%, and resells those shoes through the Amazon web
store. As Amazon accepts orders, they are channeled back through the
system where the orders automatically appear in Small Potato's Peachtree
Accounting system. In other words, simply by setting up their products in
their Peachtree Software system, Small Potato's products are automatically
sold through the Amazon portal, and hundreds, if not thousands, of other
portals.
In this example, everyone is happy:
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Small Potato's is happy because this solution allows their products
to potentially be sold automatically through thousands of portals.
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Amazon is happy because they just made 20% profit on the sale of an
item which is drop shipped from the Small Potato's warehouse. Amazon
never even touched the item or incurred a single cost directly related to the
item. Sure, Amazon runs the risk that Small Potato's will not deliver,
but that is another problem which can be easily mitigated in much the
same way that the seller's reputation is profiled on Ebay. If
Small Potato's runs into delivery problems, then the Mega Web Catalog
captures and reports those problems. If those problems are severe,
Amazon and other portals simply drop the Small Potato's product
line.
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The Mega Web Catalog folks are happy because they add a small
percentage to each transaction as orders flow through the system. For
example, Amazon sells a pair of Small Potato's Small Fry shoes to a
customer for $24.00. Amazon keeps the $4.00 profit, and sends the $20 to
the Mega Web Catalog company There, the Mega Web Catalog company takes
out 40 cents, and passes the remaining $19.60 on to Small Potato's.
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The Peachtree folks are happy because their accounting system
instantly ties in all users to the Mega Web Catalog, and everybody
around the globe scrambles to purchase and install the Peachtree
Accounting Software system.
To be sure, there are key problems that need to be overcome. However, I
personally see relatively easy solutions to all of these problems. Consider:
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The technology is already here. The Oracle, Microsoft SQL Server, or
IBM databases will handle this mega web database just fine. The
Peachtree Accounting system already pushes out a complete copy of its
database to the web at regularly scheduled intervals. Elaborate
electronic supply chains have been set up with Wal-Mart and the
automobile industry for more than a decade - and they are well proven.
The web portals are already set up and selling goods and services as you
read this. Synchronization is used by millions of companies and
individuals each day - this technology works now. Encryption and
security measures have been widely deployed within the financial
services arena, and they are working well.
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To fully grasp the model, you must picture in your mind that the
Peachtree accounting system (and other accounting systems of course)
will contain numerous new data fields that will feed into the Mega Web
Database. Pictures, diagrams, schematics, blueprints, VRMLs, detailed
descriptions, hyperlinks to detailed web pages, quantities, pricing,
volume pricing, locations, quantities by location, endorsements, case
studies, reference lists, etc. will all be maintained by the system and
passed along through the Mega Web Catalog to the various web portals.
This will allow the portals to sell products with unprecedented levels
of product information. Further the portals could use this information
to solve many potential problems. For example, suppose the supplier's
quantities on hand drop below a certain level or that the supplier's
satisfaction ranking falls below a certain level. In either case, the
Amazon portal could instantly and automatically eliminate the product
from it's web store until such time as the quantities or rankings return
to acceptable levels. Its is just a "what if" statement in the
SQL query - it's no big deal.
I believe that this is a natural business solution that will evolve. We
already have the necessary technology. All we need now are a few people with
grand vision, a strong company backing this plan, and about $50 million in
seed money. Microsoft is a strong candidate to pull this off. Oracle could
certainly do it, they already own the technology to do this. Unfortunately,
I believe that the folks at Oracle would be too consumed with the politics
of avoiding the creation of a solution that integrates with the current
Microsoft technology that their version of this solution would never get off
the ground. Ingram Micro could do this, but they may be blinded in much the
same way that the train companies thought they were in the train business
rather than the transportation business back in the early part of the last
century. IBM could certainly do this, however IBM seems to consider
themselves to be in the hardware business - many of their non hardware
initiatives fall flat. I believe that Hewlett Packard could be a company
with the resources and vision to pull this off. America Express could do this, especially through
their small business initiative. Heck, I could do this - does anyone out
there have $50 million that they could loan me? I'll pay it back - I
promise! : )
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