Online Marketplaces have been taking on sales risks by carrying inventory through quasi FDI compliant partners. You will find that some of the big marketplaces have one or two major sellers whose names keep appearing across several major categories. Even for the ‘Marketplace Exclusive’ deals, the seller is the same again and again. It is highly unlikely that these sellers are profitable as the selling price could often be lower than the procurement price. Yet these ‘Sellers’ have ongoing relationships with the marketplaces. This will come to an end soon as marketplaces need to become profitable and also become true marketplaces with natural competition.

Also as the cash burnout increases and the cost of acquiring customers also keeps increasing, marketplaces will be forced to change their business model and start making revenue from advertising and preferred listing status.

This poses a challenge to brands that hitherto have largely delegated the marketplace sales to the general retail trade or have appointed specific distributors to sell on these marketplaces.

As the marketplace operators increase (we already have Amazon, Flipkart, Snapdeal, Paytm and soon to be launched several other marketplaces), the task of selling on marketplaces will become highly complicated and also constantly evolve based on the business models being adopted by marketplaces

Can brands handle this complexity themselves? Yes they can. But at a huge internal cost and with the need to set up a significant business unit within the company that will handle all marketplace sales

Can brands leave it up to multiple distributors to sell on marketplaces. Yes, the only reason they would do that is because the distributors carry the inventory risk and are responsible to absorb all returns.

But are distributors the right choice for the future. NO. Unless they too come up to speed with the requirements and have teams that have the right skill sets and capabilities. A tough calling when resources are being taken into the mainstream ecommerce industry in droves.

So how should a brand go about its online marketplace sales?

Online marketplace sales requires the following skills and capabilities

1. Deal making with the online marketplaces
2. Merchandising – deciding what to sell, when to sell, where to sell – strategically and tactically
3. Promotions – working with the marketplaces in a way that does not create major channel conflicts with the regular trade
4. Stocking, warehousing and inventory management
5. Content Management in the formats and as per processes defined by marketplaces
6. Order processing and customer service
7. Seller rating management
8. Analytics and reporting
9. Ongoing strategic planning
10. Marketplace relationship management

In future, as marketplaces move to get advertising revenues and preferred merchant and search word listing will be the norm, the brand has to build the additional costs into its media plans. Which means that the partners who are selling on marketplaces have to be able to advertise and get preferred listings. These are new skills and ongoing capabilities that they would need to invest in.

In Summary

While brands have evolved from a position of ignoring ecommerce to embracing ecommerce, they have to do a lot more in future if they would like to grow this channel. It is best to partner with a echannel company like ND Commerce that brings its unique combination of skills and trained teams to work with brands at a strategic and tactical level to sell products on major marketplaces as the brands exclusive marketplace partner.

To know more about how ND Commerce can partner with your brand please contact mukund@ndcommerce.in or call + 91 9324 808080

Brand Sales Managers often encounter dealers and retailers who express their concerns about how eCommerce is hurting their business

Instead of going on the back foot, brands can actually work with their retailers and dealers to actively participate in the eCommerce boom

One way to do so is to create and implement a Brand Marketplace Listing Program (BMLP)

Taking a cue from leading marketplaces like Snapdeal who support their sellers in several ways, brands too can play a role of supporting their channel partners sell online

The brand would need to do the following:

1. Create a Brand Marketplace Listing Strategy
2. Identify key dealers and retailers who will be a part of this. Preferably high performers with a good track record on regular business
3. Set up guidelines for marketplace listings
4. Engage with the marketplace operators like Amazon India, Flipkart, Paytm and Snapdeal to have a brand level agreement on service levels. (Service Levels is one of the biggest concerns of marketplaces and brands that can assure service levels from their dealers and retailers will get the ear of the marketplaces)
5. Set up individual dealers and retailers as sellers on the different marketplaces
6. Support the authorised sellers with good quality product visuals and product content
7. Train dealers and retailers on the marketplace listing process and service level expectations. This needs to be ongoing as dealers and retailers too face staff attrition and new team members would need to be constantly trained
8. Provide merchandise and pricing support to dealers and retailers who are on the program
9. Provide ongoing support through a central agency who can be the single point of contact for all assistance with the brand marketplace listing program

By implementing a BML (Brand Marketplace Listing) program across its dealers and retailers, the brand can play a skill development and business expansion role for its valued channel partners

In Summary

Companies need to support their channels at times like these when eCommerce is causing havoc for dealers and retailers

Get into the game and encourage and support your trade and channel partners

By doing so, companies will have more control on brand positioning, pricing and product availability on marketplaces. This will also bring in a structured approach with all key dealers and retailers working in sync to tap this new sales channel

To create a program and manage the implementation of the Brand eCommerce Marketplace Listing Program for dealers and retailers you can use the services of specialist companies like ND Commerce

Visit www.ndcommerce.in for more information.  Or call Mukund on + 91 9324808080 or email mukund@ndcommerce.in

Digital and direct to consumer marketing provides us with an unique opportunity to connect one-on-one with the consumer

Yet, we often let digital marketing play the role of brand building alone, which can be done through above the line mass media as well

One of the ways for an FMCG company to leverage its digital marketing efforts is to drive footfalls to its retailers

An illustration of the a possible use case is below

The above process would benefit the FMCG company in the following ways

1. Enabling website visitors with an option to buy
2. NO logistics and customer operations to be handled by the company
3. UBER type model – Retailer gets a customer and services the customer need on behalf of the FMCG
4. Customer data collected can be used for sampling, targeted marketing and research

In summary

There are a lot of digital marketing assets that an FMCG can use to drive new business. In most cases it does not make sense for an FMCG to be running their ecommerce online store selling products from their website as the transaction size is low and the business cannot be run profitably. Why not leverage digital marketing spends to drive business to retailers with a sales closure and service to the customer.

The customer will be happy, retailer will be happy and brand will be happy!

To explore how you can leverage the internet to drive businesses to your retailers and to have such a process set up and managed by a professional organisation such as ND Commerce, please contact

Mukund on + 91 934 808080 or email mukund@ndslindia.com

 

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