Wholesalers Set Up Shop Online

The Wall Street Journal:

When sales at his wholesale business started to wane, Eli Mechlovitz decided to take a direct approach.

Mr. Mechlovitz and his family had been selling glass and tiles wholesale in the New York area for more than 20 years. But as the real-estate bubble began to burst, the company’s retail clients started losing shoppers and slashing orders.

So last September, the co-owner launched a specialty Web site, GlassTileStore.com, to sell custom tiles and mosaics directly to consumers. The site allows customers to see close-up images of tile and mosaic designs. And they can call in for a design consultation.

“People always want to redo their kitchens,” Mr. Mechlovitz says, but with the economic slowdown, they “aren’t willing to go out and spend a lot in a store. They are looking online for deals.” He says some of the products they sell online cost as much as 50% less than what they would at a retail store.

The move seems to be paying off so far. In August, the Web site sold 20,000 square feet of mosaics made of glass and stone, as much as the wholesale business typically sold in a busy month, Mr. Mechlovitz says.

With inventories growing and sales at retailers continuing to shrink, an increasing number of wholesale companies are cutting out the middleman to some extent and turning to the Web to hawk their products — at wholesale prices — directly to consumers. The hope is that consumers who are hesitating to, say, buy that new tile in the home-improvement store will be enticed to do so when they see it for substantially less online.

But shifting gears from wholesaler to Web retailer isn’t seamless. The biggest obstacle: Wholesalers are generally not accustomed to dealing directly with consumers. So they are being forced to learn about customer service — how to answer questions, for instance, and ease consumers’ concerns, offer advice and fix problems. And they are getting a crash course in consumer advertising to get themselves noticed online.

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Photo by Glass Tile Store.

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