3Com, Partners Benefit From Shift of Online Sales

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After deciding that the operation of its online store was becoming too costly, 3Com is using links at its Web site to divert the purchase of products to third-party vendors.


"Our partners greatly appreciate the sales leads we send to them and see it as a major benefit of being part of our partner program," said Miranda Joseph, e-business development manager at 3Com, Santa Clara, CA. "The customers have not lost the ability to buy online if they desire and now are able to choose from multiple vendors quickly and easily. We like the model, as the cost is far lower than our own online store."


3Com, a manufacturer of network interface cards, wireless cards, hubs, switches, modems and other hardware, worked with channel management services provider Channel Intelligence to develop the links, called Channel Buy Links.


The Channel Buy Links are product-specific, taking consumers from the information-gathering phase at 3com.com to the buy page at authorized dealers. When consumers click on the product they want, the link takes them to a page listing the retailers. From there, they can click on the retailer of their choice and be taken directly to the product page within that site. 3Com currently works with six retailers.


"The cost of running our online store was too high," Joseph said. "Resources were needed for fulfillment, phone support and, of course, IT development and maintenance. We looked at the revenue generated and the cost of the site and needed to find an alternative."


3Com began a 30-day trial of Channel Intelligence's links April 30.


"After the launch, we allowed customers to buy from 3Com or our partners," said Paul Cegielski, e-business manager at 3Com. "We saw 3Com sales go down more than 50 percent but our partners were taking that business. That helped us make the decision to close the store."


In May, 3Com sent $1.4 million worth of product click-throughs to its partners. Last month, it sent $1.6 million.


"From the reporting we currently have, our revenues are at least as good as they were before if not better," Cegielski said. "We don't yet have complete closed-loop information. Since closing our store, 3Com has lowered its cost of having online purchase capability [to] approximately one-tenth of what it cost us to run our store."


Cegielski said partners report an 8 percent to 11 percent conversion rate, which is described as someone who comes to their site via 3Com and makes a purchase.


"It gave our customers more choice of online retailers when coming to our site to buy," he said. "It supported our partners who are experts at selling our products. It has saved 3Com money by using this technology and closing the store while still allowing our customers to buy online."


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