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Sun April 28, 2013
Companies Learn to Blend Physical and Virtual Commerce
The debate over the Amazon tax seemed to put e-commerce giants on one side of a bright line, and brick and mortar businesses on the other. But the fact is that the distinctions between real and virtual businesses aren't so clearly defined.
Manufacturing might seem to you and me to be the ultimate brick and mortar business. It's an industry where you make things you can drop on your toe in a building you can walk into. Not so, says David Drake.
"All the commerce I do is done electronically."
Drake owns International Plating Technology in Bristol, the first business that was registered with the ISO as a virtual manufacturer.
"All my accounting, my financial, my purchasing, all my engineering drawings by outside sources. Basically my whole company's run with three computers and two printers. Absolutely that's all I have."
He doesn't employ a single person, and yet he runs a multi-million dollar business making machines and parts for the likes of Pratt & Whitney and Fortune 500 names. He does it by designing and engineering the parts, but outsourcing the labor.
"One of the problems with brick and mortar that hurt our old company was the ups and downs with the business. There's waves, in terms of you get projects and not getting projects - you couldn't support the business on the downside."
Now because he has no direct employees, he has no overhead when there's a lull in business. The job shops that supply him can keep busy with work from other clients if he has nothing for them. Drake was part of a panel put together this week by Central Connecticut State University to look at developments in e-commerce. He was joined by a newbie to the virtual world, Tim Rosol, whose family business Martin Rosol's, is something of a local legend, supplying kielbasa and hot dogs to the New Britain area for generations.
"This is our 85th year, and we're known around central Connecticut, but we're working on growing."
Rosol's didn't even have a website until two years ago, and it was customer demand that persuaded them that they needed one.
"We were getting a lot of calls from customers that say, you know, can you ship it to Florida, can you ship it to California."
For the moment, says Rosol, only about two percent of their business comes from online. But he says ironically, their stellar local reputation is actually driving what he hopes will be a big e-commerce expansion.
"There's a lot of people that grew up in New Britain, and have moved out of state and just want a little bit of a taste of home, whether it's for a birthday or Easter or Christmas, and that's where a lot of our business comes from."
That blend of local and virtual is very familiar to Mark Bernacki, the owner of Sir Speedy Printing.
"When we started out 25 years ago, it was important to have a Main Street location, where probably 95 percent or more of our business came from the local clientele. Now we probably do less than 40 percent out of New Britain, Connecticut."
He welcomes that change, not least because it's allowed him to grow his business while downsizing his staff.
"Well, when we started off we had seven, now we're down to four. So technology's allowed us to do that. And if we can go virtual, we'll go virtual, cos that sounds sweet to me."
It might not sound so sweet to anyone looking for a job, and CCSU's Professor David Fearon says it's a reality his students wrestle with each day as they prepare to enter the work world.
"The idea that you can sign up for a company and get a parking pass and start going to work every day on an indefinite period is probably one of the ideas that's slipping away from us."
In the online economy, it's not where you sit that counts, it's what skill you have to offer to someone, anywhere in the world.