ND Commerce Blog

Choosing a Partner to Operate Your Branded Online Store

November 17, 2014 No comments
Download PDFA frequent question asked by several marketers and brand owners – should I operate my branded online store with my own team or should I outsource this to a third party specialist partner? And if outsourced, then to what extent should I build my own team and capabilities? Frankly, there is no right or wrong answer for the first question. And answers for the second question will flow from the overall brand ecommerce strategy Clearly there are a few elements that require high levels of ownership by the brand owner and these are:
  1. Creating a vision for your ecommerce play
  2. Defining your ecommerce strategy and goals
  3. Identifying the role of your own branded store and the role of market place listings and sales
  4. Ownership of marketing and traffic generation activities that will be sustained over a long term
  5. Creating your ecommerce business plan (minimum 3 year horizon)
The above can be done on your own or in consultation with an ecommerce specialist or with potential partners that may be brought into operate your online store What can you outsource? Identify aspects of your ecommerce business that can be outsourced. Select from one or more of the following key elements
  1. Web store software creation
  2. Web store Hosting and maintenance
  3. Content Creation
  4. Payment Gateway set up and management
  5. Product Supply
  6. Merchandising
  7. Warehousing
  8. Traffic generation
  9. Pre-order customer service and call centre
  10. Order Receipt, Verification and Payment Reconciliation
  11. Risk Management
  12. Product Pick and Pack
  13. Order delivery to customers
  14. Customer Service
  15. Returns Management
  16. Analytics and Reporting
  17. Customer Relationship Management
  18. Omni Channel management
Each of the above and more are areas of specialisation and one has to consider the following before making a decision
  1. Too many cooks spoil the broth…having multiple agencies and partners, each with their own view points, skills and agenda can complicate co-ordination and seamless process management
  2. Specialist skills require specialist people and these come at a cost. Putting a lot of costs before the business takes off will require higher risk taking, higher investments and may not necessarily be the best way forward
  3. Fee structure and deliverables can vary between service providers. Yet they have to work together and that poses a challenge that comes with this variance and the perception of workload vs remuneration
Our recommendation is Keep It Simple! And here is how…
  1. Separate the major elements into specific categories of tasks and activities
  2. Identify service partners who best fit one or more categories
  3. Appoint only one partner as the major central ecommerce store operator
  4. Get other partners, if any, to be accountable to the main partner
  5. Remunerate the partner a combination of a fixed fee and sales linked fees
A good way to segment the capabilities is as follows
  1. Creative, Design and Communication
  2. Web store Software
  3. Marketing and Traffic Generation
  4. Web store Operations
While there are options to involve individual agencies to do the different work, it is preferable for brands to seek and engage with a partner who can manage the online store on a turnkey basis. What does a turnkey partner do? The partner (like Net Distribution) becomes the exclusive online retailer for the brand. Under this arrangement the partner, who is the merchant of record, conducts transactions with the end consumer. The title of the goods and services is transferred to the partner. Consumers are sold the products and services by the partner (www.ndslindia.com) , who receives the money and raises the consumer invoice and then ships the product to the consumer. The ecommerce partner is responsible for all the key elements of the ecommerce operations including
  1. CONTENT MANAGEMENT covering product updates, pricing information, taxation, shipping, visual image management and uploading of all the content to the site. This also includes keeping the content updated at all times
  2. PRODUCT SUPPLY including identification of SKUs to stock and sell, product supply management and procurement from the company or its authorised distributor
  3. MERCHANDISING based on the business model, market dynamics including competition, consumer demand, conversion rates and analytics on consumer behaviour
  4. ORDER PROCESSING covering order verification, payment collection & banking, reconciliation, invoice generation and placement of the order on the warehouse
  5. PRODUCT DELIVERY to the end consumer. Starting with Pick and Pack operations at the warehouse, identification of the most desired delivery option (courier), generation of the airway bill / delivery tracker, handover to the delivery / logistics company
  6. CUSTOMER SERVICE – pre-sales and post sales. Provided using phone, email. Web chat, Video, social media response management
  7. ANALYTICS AND REPORTING. Using public and private analytics and reporting tools, the service provider will report on various aspects of the business on a frequent basis as mutually agreed – can be hourly, daily, weekly, monthly, yearly
  8. CUSTOMER MANAGEMENT and COMMUNICATIONS covering database management, CRM initiatives, ongoing customer communications, cross selling and up selling and customer retention
In summary, there are a lot of individual elements that require handling and close co-ordination. A build as you go approach is recommended. Chose a partner who can manage virtually all aspects of the ecommerce business conducted through the branded online store. For more information and insights please write to the author Ajay Miglani Net Distribution ajay@ndslindia.com