resellers

Pity the poor middleman, or even the rich ones. The name of their game is changing inexorably, and not to their general advantage. Those who survive and prosper must reinvent their businesses.

E-commerce will damage other middlemen as it is already undermining travel agents, who stand to lose $7.4 billion of air ticket sales in 2001. Even before the World Wide Web, resellers were being squeezed, as more retailers linked directly to suppliers and more suppliers went straight to customers.

Paradoxically, the Web offers a potential escape from the squeeze. Wholesale markets can be recreated or invented electronically with unprecedented ease and breadth of coverage. In the US, successful Web wholesalers now deal in surplus electronic parts, used cars, software, and a myriad other goods and services. Few middlemen will flourish without some involvement on the Web.

But that threatens to be a low-margin commodity business, with high competition. Nothing can stop suppliers from putting their catalogues on-line, or becoming intermediaries themselves. Johnson's Wax, for example, stocks Wal-Mart's shelves, not only with its own products, but other brands. Both suppliers and distributors will be jockeying to capture more of the profit chain.

That also means stealing customers from the traditional retailers. Retail cyberstores, says Business Week, are already booming by exploiting ultraconvenience (24-hour, 7-day operation, unlimited 'shelf space'), customer 'clubs' and low, low prices. Wholesalers need these same attributes to defend their existing sales: creating the necessary Web structure immediately unleashes retail opportunities.

Many middlemen will need to preserve their terrestrial status by excellent personal service which genuinely adds significant value. Corporate PC customers will go direct to Dell's Web site, say, unless resellers currently enjoying the business act as consultants, taking full responsibility for meeting the whole customer need - and keeping the promise.

Tomorrow's rich middlemen will be super-convenient, super-stocked, customer-focused, price-competitive, highly expert in their lines and responding fast to customer command in both cyberspace and on earth. Come to think of it, that's also tomorrow's rich recipe for the retailer, whose place in the supply chain is clearly under challenge. The boundaries are getting very blurred.