ND Commerce Blog

Finding a Suitable Partner to Operate Your Online Brand Store

December 19, 2014 No comments
Download PDFBrands have traditionally been used to selling products to consumers through distributors and retailers. Especially electronics, mobiles, appliances, automotive parts in addition to a whole range of product categories have relied on brick and mortar retailers. With the advent of Internet and ecommerce, electronics and mobile companies have also woken up to the opportunity to sell direct to consumer. Question is: Do they have the internal capabilities to set up and operate an ecommerce business or are they better off outsourcing it? And if outsourced, then what part of the ecommerce business do they outsource? Outsource vs. appoint an exclusive online retailer There is a difference between the two. Outsourcing involves keeping the store operations and management responsibility in-house, while outsourcing parts of the ecommerce business such as technology, traffic generation, warehousing and fulfillment and customer service. Appointing an exclusive online retailer involves finding a partner who will set up and operate the business like their own, with an exclusive arrangement with the brand whereby the online store operates under the brand name and under the brand guidelines. The exclusive online retailer is fully responsible for the management of the ecommerce business to the point that the brand may just have a coordinator or ecommerce leader with a small or no internal team. It is not easy to find a good quality partner to be an exclusive online retailer. The reasons are plenty and some of them are listed below
  1. Very few specialised companies operating exclusively in this space – where their only business is to operate branded online stores
  2. Intent of several service providers to provide the service to gain a client name or to simply satisfy their investors or add a new service to their distribution business. The objectives have to be to provide high levels of engagement and anything short of that does not work in the medium to long term
  3. Skills and attention required to operate a brand online store are very different from a distribution business. While distributors may have capability to invest in stocks and provide a fulfillment service, that is a very small part of the requirements of successfully running a branded online store
  4. Brand empathy and Customer Service Focus – this is one of the biggest challenges as it is rare to find an organisation that has a deep history and organisation DNA to manage individual consumers on a large scale
Summary As a brand and business owner looking to set up an exclusive brand online store, do an analysis of the key factors that are likely to make this initiative a success.

An indicative illustration of the partner selection is given below

Factor

Weightage

Comments
Engagement of senior management of partner in set up and management of the online store being operated under the Brand

20%

Very important for full attention to be given to your brand and this is NOT viewed a distribution and fulfillment process
Track record of working with a range of companies, brands and segments

20%

Experience counts. Work can be done by many but a team will ready learning and experience will help your brand ecommerce
Technical knowledge of ecommerce platforms, systems integration, IT project management

10%

Important to have this knowledge and team within the partner organisation specially if the partner is going to set up and manage the webstore software in addition to store management
Supply Chain and Order Processing capabilities

10%

This is a critical element of the business.  As stocks may not all be held at the partner location, it is very important for the teams to have the knowledge and experience of multiple supply chain options to make the process cost and time efficient
Ability of the partner to provide digital marketing services including SEO, SEM, Affiliate Marketing, Campaign Management and CRM

10%

Important but can also be outsourced to others. An understanding of these key concepts allows the partner to interact in a more meaningful way with you and your agencies
Track record and history of the company in the area of consumer marketing

5%

Important to have a sales and marketing approach as the online store is more than just a sales channel
Financial Strength of the partner

5%

Important but not so important as the product supply can be through a distributor who can invest in stocks
Warehousing capability (in-house or outsourced)

5%

With several specialised service partners, your ecommerce partner need not be a specialist in this area. They can always use a specialist partner
Geographical spread of offices and locations

5%

Saves some time and effort in the rare case of exception management
Historical renewal of agreements with clients i.e. longevity

10%

Important to know this as it shows the loyalty and the mutual respect that the partners clients have with the partner
Proximity to client office

0%

Not important in today’s day and age. More important is to meet and at periodic intervals and collaborate well at all other times
  Add another 100 % for the DNA of the service partner – assess this by meeting the partner’s teams, understanding their culture and their approach to customers seeing their offices and by talking to their customers In short, finding a partner to operate your company branded online store is like a marriage. It’s not about money but about compatibility, understanding and patience 🙂 ————————————————————————————————————————————————————————————– The contents of this article are based purely on the personal views of the author and no organisation associated with the author is liable for these views. For more information and insights write to the author Ajay Miglani,  Net Distribution.   www.ndslindia.com  , ajay@ndslindia.com