Member Article

Tradebox director Stephen Bales explores how online retailers can fulfill demand

eBay.co.uk recently reported that over 45,000 new business have registered on the site since 2008, of which 24,000 registered in 2010 alone. So what’s the attraction? The obvious answer is footfall. eBay is an amazing shop window that attracts millions of online shoppers every month and provides online retailers with a global reach.

The same can be said of Amazon which provides an equal level of exposure. The upside is that both marketplaces are accessible. You don’t have to create your own website and market it, the platform and customer base is already there. The downside is the cost and the potential complexity of getting ‘set up’. Both platforms are also ferociously competitive in terms of retail pricing.

A solution provider within the UK online retail market since 2006, our customers typically sell across multiple platforms; usually, eBay, Amazon and a website. By the time the customer finds their way to our door they are pretty well established, in terms of what and where they are selling, and are looking to streamline their business to make things easier.

Regardless of what our customers sell, and there have definitely been some ‘interesting’ products, they all face the same logistical problems. If you turn over volume sales you are going to have to systemise at some point, just to remain competitive.

eBay is a great example. It’s not enough to generate demand; you have to satisfy it too, especially when your performance as a seller is constantly being assessed and reported for every other potential customer to see. Nevertheless, eBay and Amazon are still great start up platforms. Yes they charge fees but it’s still cheaper than the costs you would incur with a bricks and mortar shop, with potentially, in the current climate, not a lot of custom.

Online retailers need to systemise just to stay on top of the orders. There are a number of levels to this. The initial level is order management; identifying what’s been sold, getting it picked and packed, ensuring it has the right carriage chosen and then getting it shipped in a timely fashion.

Then there is purchasing; what’s running low in stock, who to order it from, best cost price, delivery times to ensure you have sufficient product in stock to fulfil demand.

Finally, there is management information. Busy retailers without systemisation often don’t have time to get to grips with this. I often meet retailers who know what their best selling product is, because it’s flying off the shelf. What they haven’t found time to get to grips with is what kind of profit margins their making on their products and their business at large. Generally this lapse is a product of a successful sales strategy which isn’t complemented with a systemisation strategy.

It would be interesting to know how many of the 45,000 new businesses that started selling on eBay.co.uk since 2008 actually made a profit and how long it took them to find out if they did, or did not.

At some point in the future perhaps these community platforms will adopt a more responsible approach and provide their sellers access to, and visibility of, all solutions to allow sellers the opportunity to make an informed choice that may lead them to achieve systemisation.

This was posted in Bdaily's Members' News section by Stephen Bales .