In 2016 Digabit CEO Alan Sage presented a talk on the future of eCommerce for manufacturers of equipment and machinery. The main theme is that buying spares and replacement parts must eventually become as easy as buying consumer products on Amazon or similar B2C online experiences.

1. Selling manufacturing equipment
parts online is more difficult than some
imagine. Alan Sage founded Digabit
in the US, after meeting an original
equipment manufacturer executive
who was frustrated by the distribution
of his company’s technical documents.
Even with equipment costing millions
of dollars and providing customers with
thousands of pages of documentation,
there was no easy way to link these doc-
uments, update them and redistribute
them. So Alan Sage and Digabit created
Documoto, a modern, web-based library
for technical documentation and parts
catalogs.
Two giants that have tried and failed to
sell parts online are Amazon and Google.
Which Alan Sage pointed out for his
audience at Copperberg’s Spare Parts
Business Platform at Hotel Birger Jarl in
Stockholm on February 3 and 4:
E-COMMERCEANDTHE INTERNETOFTHINGS (IOT)
ARE GOINGTO BE BIG REVENUE-GETTERS
IN SPARE PARTS SALES INTHE FUTURE.
But for companies who want to cash in on that, it won’t be easy, says
Digabit CEO Alan Sage.
- Most manufacturers lack the technologies to reach their customers
and to do transactions online.
- Five years ago,Amazon and Google
made multi-million dollar investments,
to get equipment manufacturers to put
parts on their sites.They failed miserably.
This is because Amazon, for example,
assumed that if the part is in stock, it’s
available.They also assumed that parts
can be shipped through the traditional
methods.
Alan Sage continued at Copperberg’s
Spare Parts Business Platform:
“-IfsellingpartsonAmazon
hadworked,Iprobablywouldn’t
behere…”
Sage refers to the fact that in June last
year, Forrester Research produced a
Forrester Wave report, saying:
- E-commerce in manufacturing will
outpace retail in the coming ten years.
Howbigisthepotentialfortheaftermarket?
It’s huge! New equipment revenue is big,
but the profit margin is typically around
15 per cent.The after part sales margin is
40-50 per cent.
IOT is one of the biggest investments we
see manufacturing companies making
currently.
- Amazon are making one of the largest
single investments in the history of their
company in IOT, and IOT investments
globally will reach two trillion dollars by
2020.
IBM for example, announced this year
they will be making a three billion dollar
investment in IOT infrastructure…
But there is a lot of ground to be made
up,Alan Sage concluded to his listeners:
- The dealers are slower to adopt tech-
nology than you are. Equipment manu-
facturers sell most of their parts through
their dealer networks. Many still use
printed books, PDF:s…
And those dealers, who have started to
get the grasp on online technology, have
a new name:
- We snow see the emergence of Super
Dealers.They are an extension of the
equipment manufacturer themselves.
Alan Sage,Co-Founder & CEO,Digabit
Alan Sage is co-founder and CEO of the software development firm Digabit. He started the company after consistently hearing from
manufacturing executives aboutthelackofmodernsolutionsforpublishing,updatinganddistributingtechnical documentation, including
parts catalogs. Digabit’s cloud-based suite of tools – Documoto – gives buyers, dealers and other affiliates the most powerful parts
lookup and eCommerce platform available for manufacturers.Alan is a visionary entrepreneur who believes in customer-driven
product development.
R.Okpu
NEWS
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