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McMaster Carr must be shuddering right now.
Prices are still twice as high as the items I spot checked from McMaster
Indeed. One nice thing though is that they honor Amazon Prime free two-day shipping.
Side note: McMaster has, hands down, the best/most useable site I've ever used. The flow always gets me quickly to exactly what I want, even if I don't know what that is going in.
Prices are still twice as high as the items I spot checked from McMaster
It's a hardware store that sells pretty much every single part you could imagine or need.
McMaster Carr must be shuddering right now.
They should take it as a cue to start differentiating themselves as the experts Amazon aren't. Amazon jumping in could be a rising tide, rather than a destructive force, if McMaster Carr plays their cards right.
The website has a lot of relevant data that you need to make informed buying decisions. sometimes they even have cad file downloads with tolerances listed depending on the part.
Needless to say, Industrial Supply is a low margin, volume business that requires high service levels. Most Industrial Supply companies sell the same products, there really isn't a differentiator. As always in retail, price, selection and availability are crucial in making sales.
This is a good match for Amazon, and obviously they have everything in place already to make this a success e.g warehousing, payments, ordering channels etc. It's worth noting most companies who seek industrial supply want credit - amazon already accepts credit lines though obviously these are not as nice as the cash they get instantly from credit cards and payments.
I guess the only thing Amazon lacks in this regard is a physical presence, something that Grainger, Fastenal, Airgas etc and other Industrial Supply companies have in hundreds/thousands of stores.
In terms of the market opportunity and potential success for Amazon, Industrial Supply is a huge and fragmented sector. The leaders mentioned above have low single digit market share, the same applies world-wide. The business itself is not hugely profitable, but it moves slowly and hence is relatively straight forward in regards to operation, forecasting and numbers.
The other bit is there is the whole interaction model. In the fabricator world they seem to get an account with one of these companies, order various bits all month long and then get a roll up once a month or so on their purchases. That doesn't seem to be an Amazon compatible model yet.
It will be interesting to see how it works out.
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I've done a lot of ordering through McMaster Carr, and the ease, delivery time and selection are amazing. It's strange to say this, but they're the one company that I don't see Amazon being able to distinguish themselves from. McMaster is already operating at that level.
Delivery time is why I buy from McMaster. If I get the order in early enough, a dude in a van shows up in a few hours .
Prices are still twice as high as the items I spot checked from McMaster
To anybody that doesn't know what you're talking about: http://www.mcmaster.com/ It's a hardware store that sells pretty much every single part you could imagine or need.
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To anybody that doesn't know what you're talking about: http://www.mcmaster.com/ It's a hardware store that sells pretty much every single part you could imagine or need.
I've never found Amazon's site particularly well done, but they could definitely learn a thing or seven from that site.
What would you want Amazon to learn from them?
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Indeed. One nice thing though is that they honor Amazon Prime free two-day shipping.
While McMaster shipping certainly isn't free, it's always overnight, and often less than 100% of cost, so if Amazon is actually 2x price, McMaster still makes sense. Side note: McMaster has, hands down, the best/most useable site I've ever used. The flow always gets me quickly to exactly what I want, even if I don't know what that is going in.