"BFG Buys Commerce Website Thus Customer Base as Well" Really, that is what you think BFG's purchase of Commerce's domain name & website means? BFG now owns Commerce's former "Customer Base"? Not!!!"
-Anonymous
My response:
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| Would you pay more for access to FBs "customers" or a site of buggy whip manufacturers or start from scratch? |
Since this is a website with a large customer base it is akin to buying a catalog company and with it comes the customer base/mailing list/etc. This is a common practice in media to buy an existing asset with a large customer/subscriber base.
For instance someone buying Facebook would pay mostly for the users not the site itself. You Tube would be another example. Huge user base that would cost the buyer dearly. Sprint on the other hand would not be a good buy because the user base has evaporated. Would you want to buy a cellular network with dwindling subscribers? A small online garden store with small customer base is not a good buy. This is a brilliant move by BFG. BFG now not only can service existing customers without having them to switch to a new website and learn how to navigate a new system Commerce customers anywhere can log in and buy. This allows BFG an amazing opportunity as they have in a sense laid track into markets not currently served by having the infrastructure in place first. It does not cost BFG anything if I in New York do not purchase from them online. If they start sending a sales force here guess what the web site makes it much easier.
If you have tried purchasing online from lawn and garden distributors you know as well as I do most of their sites suck and are not easy to buy from. The searches take too long and often display only a small amount of results. Even True Value's Membersonline, which is the best I have used, has some drawbacks.
By purchasing the website and keeping it functional by allowing existing customers to still log in and buy is the same as "buying" the customer base/subscribers.
So to sum up yes BFG did buy an asset called a customer base. All businesses are priced to sell based on more than the real estate. Retail businesses are priced on sales and good will. These two items far outweigh in many instances the real estate, inventory and web site.
Did BFG buy your store no of course not but if you bought from Commerce online yes they did buy you as part of the customer base.
Garden advice you can dig!
I have to disagree with you on one point Greg. I do not think that it is a "brilliant move" on the part of BFG. They, like Wetsel Seed (the last company they bought) are more so oriented to service growers and green goods operations. These are important aspects of any garden centers business, and certainly the most profitable. But not the reason the typical customer is driven to come to your store. It is retail. Something Commerce was good at. Neither company has done a great job at the retail in the past, and in season, very low fill rates if anything at all. I think it was a waste of money. The distributors that will make the most of Commerce's demise are the one's that can provide a full service to their accounts from the sale of goods, high rates of order fulfillment and the right marketing programs to drive customers in your door.
ReplyDeleteNot knowing the track record of BFG and, if what you say is true, their performance from the past will tell the story going forward. Had BFG a good record of serving the retailer the move would be brilliant.
DeleteThanks for the update
I agree with anonymous to a point. Wetsel had great retail customer service and fullfilment prior to the BFG aquisition. After the merger, in traditional BFG territory where they overlaped with Wetsel, retail service and fullfilment tanked - primarily due to the "BFG" reps taking the choice accounts from Wetsel personnel. Where BFG had not had prior sales coverage, south and east (Virginia, Carolinas, Maryland, Eastern PA, NJ) where the old Wetsel reps kept their customers and territories, service to the retailers was not changed. There may have been some fullfilment issues due to the BFG logistics team taking over and mucking things up. Now, what BFG did with the dismise of Commerce is, they acquired a strong retail minded sales manager and retail mindede sales reps to help them "rebuild" the retail sales, not only in the territories where they acquired reps, but also in the markets where they lost the old Wetsel retail business, especially in Ohio, Indiana, Western PA and Western NY. Essentially, BFG is trying to build the retail distribution side of the business from scratch because they so mutilated what Wetsel had built for 100 years. They will get some business from the acquisition of the Commerce reps, but others will be hesitant and skeptical considering what has transpired with BFG over the last 18 - 24 months with the Wetsel merger. They are banking on these reps to bring all their business over to them, but it will not occur. Acquiring the Commerce website and online sales feature is somethiing they have been trying to do for a long time now on their own. They will use the feature to help all their sales reps - BFG, old Wetsel and new Commerce - to set up a customer base, as well as use it to gain a few customers that liked the old way of doing things, via the online service. Its just a way for them to make sure they are getting in touch with any and all available customers out there, especially the ones that were not called upon by sales reps. They will not fully maintain the sight for long once they build their own online purchasing system. BFG likes to do things their way - they do not like to acquire things that were designed by others because they thinkk that their way of doing things is the right/best way. Unfortunately it has created an elitist persona that many of their customers/non-customers are and have been turned off by. They are not, and should not, be anyones choice as their primary distribution option for retail lawn and garden merchandise.
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