Over recent years, we’ve spoken with a number of tech companies that have built, or were in the process of building, e-commerce solutions for the steel sector.
Each of these companies sees huge opportunities in the sector, but their business models generally rely on traditional distribution and manufacturing businesses to supply the materials they want to sell online.
I get it, I see the same opportunities.
The market for steel globally is huge, it’s growing and there are so many cross-sales opportunities. I don’t need to throw in figures about online spending habits, we all see it. We all buy online. It’s more convenient, it saves us time and often money, so the big surprise is that the businesses that make up the steel manufacturing, distribution and processing sector have been slow in building their own online marketplace.
Matsource, SteelBuy, Steel Scout (a Tata Steel digital venture), Flocon and Fractory have all been featured on our podcast The Metal Guys Talk Business to talk about revolutionising the way that steel and other metal products can be sold.
So why have the supply chain companies – who will facilitate these online orders – been slow on the uptake of e-commerce platforms?
I think there are many reasons, but the key is that the manufacturing, distribution and processing of steel is costly. There are very few new market entrants because of the high costs of capital equipment or the depth of stock required to compete with established companies.
This means that change is slower in the steel sector than in other industries where the associated risks to your business can occur more quickly.
We’ve seen the demise of traditional businesses when tech cuts out the middleman. Netflix vs Blockbuster, Spotify vs HMV, Uber changing the face of getting a cab, and of course the decimation of the traditional high street, first by out-of-town shopping centres (malls) and then Amazon. I don’t see the rise of online platforms in the steel sector as being quite as dramatic as the above, but there is both risk and opportunity to the establishment.

What do I know about e-commerce?
Before launching this magazine, I ran a successful steel stockholding business with my father, Graham Comerford, called Stock Services.
Back in 2007, I built a rudimentary online catalogue for the business. The system allowed users to log in, check stock levels, see pricing information and place orders. We had this system in place for around two years, but ultimately changed the functionality to remove all of the pricing information as we felt that we were losing orders to our competitors who could benchmark against our prices.
The idea of an online e-commerce platform didn’t leave me, but in 2009 we changed the website to be “quotation only”, and it remained that way until I exited the business in 2018.
Looking back, the website served us well. It created leads from all over the world as people used Google and other search engines to look for stock material that they couldn’t find using their normal supply chains. We gained new customers and diversified our product offering as we supplied more packages of materials. We also networked with other larger stockholders and manufacturers so that we could increase the scope of our supply online, which resulted in more enquiries.
I did feel like we were failing the customers when we removed the pricing, but the worries we had were no different from anyone else looking at building a website for their business:
- What happens if we show products with ZERO stock on the website?
- How do we alter pricing between orders of 1 piece or 100 pieces?
- How do we calculate shipping for 1 tonne compared to 100 tonnes?
- How do we quote for mill lead times?
- What happens if the order is for multiple products of differing quantities?
- Will customers only enquire about the items they see online?
- Will customers benchmark our prices and then order elsewhere?
- If our price is too high, will they assume we’re uncompetitive for all of their jobs and never return?
- Will our competitors check our stock and prices and undercut us?
- Will our customers avoid picking up the phone to talk about an order they are ready to place?
- Will we miss out on added-value work or additional processing and machining?
The list could go on and on.
The main problem we faced was that we had a large portfolio of products and this meant we had a huge amount of administration to keep our prices updated. We also were limited to changing prices for each item based on the quantity or volumes that we selected rather than looking at the overall job value.
Before Stock Services exited the distribution sector, we spent many months looking at building a new e-commerce site where a price would be created from a list price model. The list price would feature an uplift factor that would be based on product scarcity, and then would apply a discount percentage based on the total value of the job. If a customer added more items to their basket, increasing their overall purchase price, the discounts would increase further.
It may sound complicated, but we were trying to get the website to quote the way that we – experienced salespeople – would quote a client, rather than just line by line like a normal website would.
What’s going on with e-commerce today?
Fast forward to 2023, and it’s exciting to hear how businesses can see so much potential in e-commerce solutions.
Many of the obstacles that I saw when evaluating which platform to use to build an e-commerce platform with a nimble pricing strategy have now been overcome by new technology, and other types of e-commerce solutions have grown in popularity too.
There are a few different types of e-commerce platforms now operating in the steel sector:
- Steel producers/mills and distributors selling their own products directly (e.g. Nero or Flocon)
- Aggregation sites (e.g. Matsource) that capture enquiries and allow users to buy from the best source, be that based on delivery time, price, payment terms or a combination of the three.
- Online stock marketplaces where stock is listed for sale from various suppliers (e.g. SteelBuy)
- Online manufacturing marketplaces (e.g. Fractory)
Steel producers/mills and distributors
These e-commerce platforms, as operated by companies like Nero and Flocon, are typically an extension of a business website, or they become the principal focus of a business’s online presence.
They are built to offer products and services for sale and often require users to log in to see pricing information.
As with any B2C platform you’ve used, they usually have the following functionality:
- Product or service catalogue
- Technical data and product information
- Shopping cart and checkout
- Payment processing
- Order and document management for test certifications and invoices
The range of products offered will match that of the business. It’s not typical for other products or services to be offered that are not fulfilled or performed in-house, but there’s no reason not to offer additional products or services, and owners of these websites should see an opportunity here.
This is one of the easiest points of entry into e-commerce for a business, as there are already a variety of well-established platforms that you can use to create your e-commerce site (such as Shopify, Squarespace, WooCommerce and Adobe Commerce (Magento)), with many being capable of linking to your existing stock management software and triggering sales alerts and packing instructions through the same systems that you currently use.
Any steel company that manufactures, distributes, re-works or offers processing should really consider offering a web store to capture new leads and make sales.

Aggregation sites
These websites, like that offered by Matsource, capture enquiries and allow users to buy from the best source, be that based on delivery time, price, payment terms or a combination of the three.
Aggregation sites offer users access to a database of material through their approved supplier network. The website will collect data (such as quotation requests) from a number of approved suppliers and offer them directly to the customer.
The aggregator adds a small fee or percentage uplift, which is added to a supplier’s cost price. It’s often not seen by the buyer and is helpful for the supplier, who doesn’t need to think about factoring in additional costs into their quotations. This reflects the approach of larger aggregation sites like Compare The Market, uSwitch and GoCompare.
This e-commerce model works well for businesses that want to capture new enquiries and find new avenues for selling their products, as they can choose which of their products they want to offer on the aggregation site, sell niche products on a site that also features more common products, and potentially quote and supply anonymously depending on the features of the aggregation site.
Matsource have published an article titled “Why it’s time for material procurement to embrace e-commerce”, which you can read here: matsource.co.uk/why-its-time-for-material-procurement-to-embrace-e-commerce
The main benefit to a supplier offering their products through an aggregation site is that the aggregator will collect a wide range of enquiries from end users, fabricators, general engineering and OEMs, gaining more visitors than might be possible on a smaller business website.
E-commerce websites like these will continually onboard new suppliers and develop even wider catalogues of products from stock through to mill deliveries. As they increase their offering, they will naturally gain more customers, resulting in more of the opportunities that the suppliers want.

Online stock marketplaces
These e-commerce platforms work in a similar way to the aggregator sites, but instead of attracting enquiries for products, they allow suppliers to list actual stock quantities of their products, which customers are searching for.
We recently met with Terry Sargeant of SteelBuy, and he spoke about how customers would use their steel marketplace to check available stock, but that he expected many customers to subscribe to updates on materials that they regularly use. As soon as listings for these materials are made, a notification would be sent out to those who registered an interest in that product.
Most of the marketplace sites I’ve seen in the metal industry have focussed initially on surplus stock, buybacks and secondary material. One such example is Paul Meijering, who set up Inox Deals as a subsidiary of their business in 2014, to provide an outlet for their stainless steel surplus and non-standard stock.
I think that marketplace sites are able to offer far more than just surplus or uncommon stock. Over time, I expect them to list even the fastest moving of stock items, as even these products sell out from time to time and there are still sales opportunities to be had.

Online manufacturing marketplaces
A new and exciting area is online manufacturing marketplaces. This is a more challenging sector to enter, as the website development and additional requirements placed on the supply chain are more onerous.
Fractory, who we interviewed on our podcast in 2022, offer an online metal fabrication service and spoke about the value proposition of this type of e-commerce channel. I expect to see a lot of growth in this sector, especially as potential customers will be able to quickly get budgetary prices for more complicated items and projects.
CNC machining, 3D printing, laser cutting, bending, drilling, threading and machining services can all be sold online, so I can only see more of these types of platforms being developed in the coming years.
I’m interested to see how a web-based solution for full fabrication services could be made available online.

All of these models have merit, and businesses should use a combination of approaches to target the widest range of customers. For instance, a distributor could build their own e-commerce site, but also list their products with aggregation sites. They could also offer stock on marketplace sites and added value services through manufacturing marketplaces.
As a business, you want to maximise your opportunities to sell, and although not every opportunity is a good opportunity, I think most would like the chance to take another order. You might just land a new order from a perfect client because of your online presence. You then have the opportunity to move them into your relationship-managed set of accounts if, of course, you and the new client want to work that way, which they may not!
More online opportunities
There are still some areas that I see companies missing with their online platforms.
The most common searches that resulted in inbound enquiries for me at Stock Services were people trying to find either stock or technical data, and that was because all of our content was accessible to anyone – including Google’s crawler robots.
Adding a large volume of searchable content should be high among your priorities, and it is crucial that any data – which is a common search enquiry – is displayed as searchable text. Embedding PDF spreadsheets or images with data is of little use as Google cannot read the content, and therefore, it will not rank!
A particular issue for websites where you need to log in before checking material availability or requesting a price is that new users often just want to get a result, and don’t want to set up an account to access information.
Also, Google cannot crawl and index pages that are only available to logged in users. This is an issue, as organic traffic is crucial for website growth, and pages that are essentially hidden or difficult to index will not rank as highly for search results, if at all.
Paid search and sponsored social media advertising will drive traffic, but missing out on organic traffic by not allowing Google to find important content that’s hidden from the general visitor is crazy.
The other area I see that needs addressing is the use of chatbots. Chatbot use is increasing in the wider e-commerce world, and for steel e-commerce platforms they make perfect sense. There is an argument to suggest that all websites should use a chatbot as the initial interaction with a user. They gather information quickly and can point users in the direction they need quickly.
According to Juniper Research, chatbots will “save consumers and businesses…over 2.5 billion customer service hours by 2023.”
Visitors to steel industry websites are typically doing one of three things: buying, getting a quotation or looking for information. With the portfolio of steel products being easy to break down into groups, sizes, weights and grades for instance, it is simple for a chatbot to direct visitors, at any time of day, to the correct area of a website to buy or enquire, or to answer frequently asked questions.
As AI continues its rapid improvement, chatbots will get more effective in handling customer requests and convert more enquiries into orders or qualify new leads for your sales team.
Is e-commerce the next big step forward in the steel industry?
There are many steel business owners that are sceptical about e-commerce, but I’d suggest if these owners are not interested in building their own platforms (which I think they should) then they need to at least consider the other new online sales channels and acknowledge which of them could be beneficial.
There are always new customers looking for your materials and services, and much as you might not like to admit, you really do not know everyone.
Some of the e-commerce platforms have large catalogues where you can just list all of your stock. If you are a multi-product stockholder, for instance, you may have an enormous range, with some products that your own regular customers might not be aware that you offer, and you might prefer to leave the maintenance of such a large online catalogue to someone else.
If you have added value services, consider creating or at least registering with an existing manufacturing marketplace. This will create opportunities. They may not happen overnight, but in time more traffic will come through those sites, and with most you can register for free.
It’s the same with the aggregation sites – what’s the worst that can happen? You’ll get enquiries that you otherwise might not have got, you’ll have the opportunity to offer on them and fulfil them. If you don’t win enough orders, you can speak to the aggregator directly to discuss what’s happening and what can be improved. The aggregator doesn’t have your stock to offer it directly themselves, so they need you just as much as you need them, and it’s in their interest to give you feedback and work with you to promote your products.
Online stock marketplaces, which sell your stock for you instead of just generating enquiries for you to fulfil, go one step further in reducing the amount of work that you have to do to make a sale. The best platforms are able to integrate with your existing stock management software and allow you to set your own pricing, making it as easy to sell your products as if you were selling directly yourself, with the added bonus that these platforms will likely receive higher visitor rates due to their wider collective product offering and increased searchability.
Final thoughts
The overall message I’m trying to convey is directed squarely at company owners, business leaders and managers that are ducking the e-commerce question, or are unsure where to start with their e-commerce journey.
Times are changing – they have been for a decade or more – but the sector is moving quickly now. You really need to look at where you want to position your business over the coming years, and whether your traditional sales methods are going to fulfil all of your needs going forwards.
I strongly believe that improving your online presence needs to be a big part of your sales strategy, and that being able to sell your products or services via an e-commerce platform of some sort can only be beneficial to your company.
What do you think? What are the barriers for you to start your e-commerce journey? What successes have you seen since implementing your e-commerce store? Send me a message on LinkedIn or contact me via email: peter@comtongroup.com