The e-commerce market is growing at the rate of 20-30% per year and shows some very impressive examples of how you can make money from the business of online stores. Therefore, the desire to join such an abundant source of profit, even on the part of suppliers, seems quite logical. Which of the existing Internet access formats are suitable for manufacturers and distributors? This question is answered by Vladimir Makarov, an internet sales expert at Centrobit.
Vladimir Makarov - Sales and Marketing Director, Centrobit.
Centrobit is a Russian developer and integrator of turnkey Internet distribution systems and e-commerce projects. It offers products that allow you to find new customers and automate the work of suppliers with online stores.
The first format: cooperation with large online stores
The most obvious, profitable, but unreliable option is to organize online sales through well-developed online stores like Wildberries, Sapato or Lamoda. Why unreliable? Because work with them is carried out as with a large retail network and is fraught with the same problems: as soon as the brand is less competitive compared to new brands in the pool, the store refuses it, thereby depriving the manufacturer of a significant share of sales. Another disadvantage of working with large online stores is that the manufacturer must supply goods to them at a very low price. However, these shortcomings should be regarded as natural features of the format, work with which can be considered mandatory and effective for any supplier.
Second format: own online store
The success of the largest online stores leads many manufacturers to think that opening their own online sales channel will certainly bring impressive profits. The math seems to be simple: if other online stores earn money from the supplier’s products, the supplier himself, selling his goods through his own online store, will have a large margin, which means that this business is worth doing. However, in reality, this scheme is often doomed to failure, because in the business of large online stores there are a number of important nuances. For example, in their assortment there are not just one or two brands, but dozens, the number of articles exceeds several thousand, cross-sales are organized (“they most often buy with this product”), and the categories of goods are selected so that the buyer is interested in making complex purchases. All these things are insignificant only at first glance, because in reality visitors to online stores are used to and want to make a choice from a large number of products, which not every manufacturer can boast of. And this is not to mention such services as fast delivery, free fitting, quick response to an order, a working online assistant on the site. All these functions require human and financial resources, which the supplier is most often not ready to provide. And this unpreparedness is largely due to the fact that a company that suddenly decided to engage in online sales refers to the project as an additional area of activity, and not as a separate business with its own business plan and staff. This approach is fundamentally wrong, since online sales is a serious business with a lot of pitfalls that you can’t master “with the cashier” and with a budget of 200-300 thousand rubles. Therefore, opening your own online store on your own for manufacturers may be relevant only if it is planned as a separate investment project with a separate staff, serious funding and great development prospects.
Format Three: Outsourcing Online Store
If the desire to have your own online store is great, the plans for it are serious, and the budget is generous, you can turn to the services of third-party companies. In particular, such brands as Otto Group, Ozon, Everada and KupiVIP are engaged in the launch of brands on the Internet sales market. They are ready to take on the whole range of tasks from creating content and website promotion to organizing a warehouse, logistics scheme, and an order center. It costs, of course, incredible money, but the status of the listed companies as leaders in the online sales market guarantees a high-quality result and an “plus” in average after three years.
Fourth format: direct permanent sale to small online stores
As mentioned above, delivery to large online stores can result in a loss of a significant share of sales in the event of termination of cooperation. When working with small online stores, this risk is absent, although operational activities in this case require significant resources. However, there are ways to automate order processing for small online stores. Portals such as tiu.ru, optlist.ru and agorab2b.ru provide an opportunity for online store owners to find and establish work with a wholesale supplier. At the same time, depending on the portal’s functionality, suppliers can interact with customers in different ways: some of these product platforms only allow you to post information about your product, and some, for example agorab2b.ru, connect to the supplier’s 1 system to get the latest information about the product and balances and transfer orders from online stores directly to the accounting system of the supplier company. Goods present in the supplier’s 1C are instantly displayed on the windows of online stores and are automatically deleted from there as soon as the goods end at the supplier’s warehouse. It is important to understand that the supplier in this case must have high-quality merchandise content in 1С - product description, characteristics, photographs, and the possibility of piece-by-piece shipment of goods from their warehouse. The format of such sales is especially good for distributors and representatives of the brand, since it fully meets the condition of continuous operation. Working with such portals is mainly suitable for the shoe manufacturer only to get rid of residues, since collecting pre-orders with its help is inconvenient.
The fifth format: the use of a wholesale online store (B2B-system)
Companies that accept 50 orders per day need to automate this process. The b2b system can help them in this, which, although it does not directly allow finding new customers, it takes on all the routine work with existing partners and improves the quality of the service provided. This format can greatly facilitate the work of the manufacturer, as it removes the strict need for the presence of customers at exhibitions or in showrooms. B2b-system is arranged as follows: on the manufacturer’s website, a place is allocated for the system’s interface, which is available to each client through his personal account. The system interface integrates with the supplier’s accounting system (most often 1С) and allows customers to interact with the manufacturer or distributor without the help of a sales manager. In the personal account, the client can view the entire assortment of the manufacturer with photos, see his purchase price for the product, conveniently place an order or pre-order, which, after registration, is automatically displayed in 1 with the supplier, write out an invoice, track the status of the order, form a reconciliation report for any period, etc. .d. The manufacturer can organize a bonus system in his account system that motivates customers to buy more, and customers in their personal account will see how much they can increase the order to get an additional discount. As a result, the supplier’s managers do not spend time sending price lists, invoicing and driving orders in 1С, but rather motivating customers to make large purchases and adjusting orders received. Another advantage of such virtual systems is that they establish normal work with clients in other time zones. At the moment, such systems in Russia exist mainly only in the form of home-made tools, although there are professional versions. For example, the SAP b2b system, which is suitable only for companies already working with the products of this company, Hybris Software - for companies who want to build a system from scratch or based on SAP products, as well as the Agora Optima Internet distribution system, which is suitable for companies using 1С products as an accounting system.
Why is it better to outsource the development of an online store? Responds Yevgeny Schepelin, eTraction project director:
“Online trading is a completely different world, which is very different from the retail world with its operational processes. To understand how suppliers work, how returns are processed, how agent reports are checked, you need to go deep into the specifics of the business. In addition, the processing of individual consumer orders is very different from the warehouse processing that is usually done by retail companies.Many retail companies that have launched an online store on their own facilities, after some time realize that they cannot process on their own the quantity of orders that they receive, because this requires other storage options, a different management system, other warehouse employees, delivery services. And from the point of view of economics, opening and maintaining an online store is not profitable on their own, because online sales occupy a very small share of retail sales, and the costs of their implementation are disproportionately higher.As a result, the company spends a lot of effort, time and resources just to get the effect of multichannel and plus the brand’s image, but in terms of turnover, an online store may be less effective than opening two retail outlets. "
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