The Six Point Plan – Step 1 | Planning – Part 2: People & Process

Planning Part 2

In our previous post we focused on the systems. This time around, we’re going to be looking at the other key decisions you need to make.

Logistics and Reverse Logistics:

Even before Amazon introduced Prime and same day delivery, the logistics of sending and returning items has been an important component of the buying decision. Most marketplaces know that poor performance from their sellers can kill their entire business if buyers don’t trust that they will get the goods so, as a seller this one thing you really need to get right.

Delivery

1. Accuracy: The main priority for sellers is to ensure that you deliver the products when you say you will. If you miss your deadline, you could find your listings demoted, your account status impacted or account suspended.
2. Tracking: Using a tracked service offers you protection from buyers acting in bad faith. If you can prove that an item was delivered, most channels will find in your favour in any dispute.
3. Cost: The issue with tracked services is that they cost more. Nevertheless, you should offer free delivery and either absorb the cost or add it to the price of the item. Items with free shipping are ranked higher and may qualify for loyalty programmes or other promotions. It’s worth noting that, if you build the cost of shipping into the price of the item, you can offer discounts for multiple purchases simply by discounting any additional shipping charges.
4. Speed: The shorter you set your delivery time, the more appealing the offer and the more customers will consider buying. But you need to deliver as promised. Whatever you do, don’t over-promise and under-deliver. Remember that you can offer more than one option: it’s often best to offer one free and one expedited service and let the customers choose.
5. Logistics Options: There are, essentially, three ways to go with your logistics operations and the solution you choose depends on your current situation and the countries and channels you plan to use:
   1. You can hold stock in your own warehouse and ship directly to your customers. This option is often best for your home territory but, when it comes to international channels, you’ll be competing with local businesses with locally held stock so, you’ll either need a super-speedy and super-cheap international courier or you’ll need to hold stock in-country. You’ll also need a way to manage returns. (More on that below)
   2. Many marketplaces now offer their own logistics solutions: Amazon with FBA; Zalando with ZFS; Cdiscount; Bol and many others. It’s worth comparing costs with shipping directly because they are often priced competitively and give you access to programmes like Prime while also providing a quick solution to tackling new countries. You also face the issue of needing more stock to feed more warehouses, one for each channel.
   3. The third option is to use a 3rd Party Logistics company (3PL). Many have warehouses in different countries and offer localised returns solutions. Some are even Prime accredited meaning you get the Prime badge on your listings. This solution means you have one stock pool (or at least one additional stock pool) but cost may be a factor.

For international expansion, a 3PL will usually provide the best combination of options but can be an expensive option requiring significant upfront commitment so many businesses will start by shipping from overseas using existing couriers until such time as they see sales that justify the 3PL expense. This is a low-effort option but doesn’t necessary tell you whether a country will work because you may not be generating the sales you would with a fast / free delivery option.

If Amazon is in the mix, I would typically recommend starting any European expansion using FBA. That way you immediately get the Prime badge on Amazon and can also fulfil orders off Amazon. Once you start branching out, you can assess alternatives at that stage.

Returns

According to a joint UPS and Ebay study, 75% of shoppers consider the returns options before making a purchase. The key, as with most things with e-commerce, is to be generous towards your customers. In all cases, you should familiarise yourselves with the policies of each channel to ensure you are willing and able to meet their requirements.

1. Policies: Most customers expect to have at least 30 days to return their products. Any shorter than that could be viewed badly. There is a case to be made for longer periods. Studies show that returns levels drop off dramatically after the first 30 days so, offering a 100 day returns period tends to make little difference to the number of items returned but can increase sales conversion rates. Similarly, covering the cost of the returns instils confidence and can make the difference between a customer buying from you or going to one of your competitors.
2. Method: Most major marketplaces require buyers to initiate any returns through the channel. That way they can track performance and arbitrate should anything go wrong. There’s nothing to stop you including returns labels in the original package to make returning items easier but most will allow for a variety of returns procedures.
3. Refunds: There’s a temptation to wait for items to be received back into your warehouse, where they can be inspected before issuing a refund. With marketplaces, this is not always possible. Many put a time-limit on the issuing of refunds: if you’re getting close to the deadline, it’s often best to just issue the refund even if you are still awaiting the item to protect your account status. As with deliveries, using a tracked service can protect you from unscrupulous behaviour.

Customer Service

Marketplace integration impacts customer service operations. With orders coming in from multiple platforms, your team will need to handle communications from customers in a number of different ways.

In most cases, communications can be forwarded to an external email address and managed that way but there are a few platforms out there that integrate these communications into a single platfrom. Zendesk and eDesk are a couple of the more prominent solutions but there are others.

Regardless of the method, your team will need to be familiar with the rules and regulations so they can effectively protect your account status.

It’s a good idea to monitor your orders closely in the early stages after launching a new channel, at least until you are confident that they are being recived and fulfilled accurately and that shipping updates are making their way to the channel. This is a job you should give to your customer service people. I’d recommend twice daily checks for the first couple of weeks at least.

Listing Automation

Creating listings is one of the most time-consuming aspects of any campaign. And this is an ongoing challenge if you regularly add new products or launch on new marketplaces. Most listing tools require you to provide listing ready data so won’t solve this problem for you. Before we look at your options it may be helpful to run through the typical listing process: at least in outline.

Before you start, you will need to obtain the channels listing requirements (taxonomy) which explains the way that products should be structured. In the main, products are first placed into categories which, in turn, determine the attributes that are required, recommended or optional. When you send your data, the channel will respond with the status of each listing and details of any errors (where your values don’t match their requirements).

Data Formatting

When originating your product data, consistency is key. Different channels may want the same information but in slightly different forms: the valid value for a neck style may be, “crew-neck” one one channel and “crew” on another. Sending a wrong value will likely produce an error.

To format your data in bulk you will want to use logic and that works best if your values are consistent: if you have the same value, sometimes with a space, sometimes with a hyphen and sometimes all in one word, your rules become that much more complex.

Businesses tend to tackle this data conversion task in one of three ways:

1. Manual: Depending on the size of your inventory, this appraoch may require a lot of people and a lot of time and the task only gets bigger as you add new product or new channels.
2. Spreadsheet: You can achieve some efficiencies through the careful application of formulas and lookups in programmes like Excel (See my post on Using Excel to Create listings). This approach requires some expertise and may still take some time to complete.
3. Custom Development: If you have the IT resource, you could get them to convert your data but this can be expensive and doesn’t scale well as you’ll need to repeat the work each time you add a channel.
4. Dedicated Software: Some listing tools offer some data manipulation functionality but very few claim to fully automate the process and fewer still offer you the full control you’d need to create fully optimised listings that will perform to their potential.

Financial & Legal

When you have sales coming from multiple sources, you create an additional bookkeeping headache where your sales for each channel need to be reconciled. Pretty much every channel will provide a detailed statement but each channel pays out in a slightly different way and at slightly different times so don’t forget to forewarn your finance team/bookkeppers. In truth, I don’t tend to recommend much in terms of  integrations or automation here. While there are some good tools out ther like A2X, they don’t integrate with enough channels to make them a fully comprehensive solution.

Regarding legal considerations, review the terms of service, seller agreements, and policies of each platform to comply with their rules and regulations. When you first create an account, you will be required to declare the business’s beneficial owners and other details which, with bigger businesses, tends to be the responsibility of the Finance team. Additionally, ensure you are aware of any applicable local and international laws related to e-commerce, sales tax, and consumer protection.

Beyond that, each marketplace has its own set of policies that sellers must comply with. You will need to thoroughly understand prohibited items, listing restrictions, and guidelines for product descriptions and images. Complying with these policies is crucial to avoid account suspensions or penalties. Pay close attention to policies regarding intellectual property rights.

When it comes to international expansion things can get even more complex. Many Marketplaces now operate in multiple countries and provide opportunities for international selling. You will need. tofamiliarise yourselves with any import/export regulations, customs duties, and shipping logistics to ensure compliance. Assess the language and cultural considerations to tailor your product listings and customer support accordingly. Determine if you will fulfill international orders yourself or leverage the fulfillment services provided by the platforms.

The Department for International Trade website has some useful information and can provide practical assistance.

Marketing and Promotion

You should develop a marketing and promotion strategy to increase visibility and drive sales. Implementation comes later but, for now, you will need to know what your policies are going to be. How will your new channels work with to the rest of your business: will you run the same promotions that you run on your website or should they be different? You may decide to use Ebay just for clearance, in which case it would probably have independent pricing. For other channels you may want to simply mirror everything exactly but have some leeway to keep things competitive.

It’s worth noting that many channels limit your ability to show markdowns: even if you send Amazon an RRP, they will often not display it and, while Ebay may require you to use their Markdown Manager, you can ask for Strikethrough pricing to be activated on your account.

Most sites offer a range of options to promote your products. Pay Per Click is increasingly popular: Amazon, Ebay and Cdiscount  all offer this type of promotion and, unfortunately, you may well need to avail yourselves of these programmes to get the exposure you’re looking for. Ebay’s Promoted listings does something similar but tends to operate on a Cost Per Acquisition (CPA) model, meaning you only pay once you make a sale. Other sites, like Zalando and Catch in Australia offer black box marketing solutions. Pay them some money and they will do some stuff to get you more exposure. What that stuff is can be a bit vague.

Promotions too can work quite well. Here we’re mainly talking things like multi-buy offers and coupons. Listings included in such promotions are often boosted in search rankings and may display some eye-catching graphics to indicate that there’s an offer so can be quite effective.

As a general rule, traffic to your listings that didn’t come from a standard search click is extra valuable. Listings tend to be ranked based on popularity which typically means its conversion rate.  I have it on good authority that traffic that comes from outside doesn’t get counted as a click but may register a sale. I encourage every business I work with to point their social media and other external marketing channels at their marketplace listings which can push it up the rankings: once it’s in the top 10, it tends to stay there so this only needs to be done for a limited time to produce lasting effects.

Daily Deals have a similar effect. Not only do they produce a quick sales hit but they usually have a lasting beneficial effect on sales long after the deal has ended.

In general, you should aim to build a relationship with the channel and work with them on mutually beneficial promotions.

Personnel

Working out what resources you will need can be tricky as it is dependent on so many factors. I would recommend that you think in terms of activities and combine or separate roles depending:

1. Channel Management: This involves configuring settings on the channel, raising support tickets, managing users that sort of thing.
2. Listing Creation and Management: Titles need to be optimised, products categorised, attribute values converted. This can be big and time-consuming but it often makes sense to combine this role with the Channel Management role.
3. Merchandising: Marketplaces need to be traded and someone needs to decide what products to make available on which channel or source products for deals or decide on pricing policies. For these, the Merchandiser role is a pretty important position. 
4. Warehouse: In the beginnning, you will likely be able to absorb any additional sales into your existing set up but, over time, we have to assume that this will grow into a significant part of your business which may require additional people to ship the extra orders and maybe even a bigger warehouse to hold additional stock.
5. Marketing: In fairness, most channels offer decent automation but, if you want to do it well, PPC should be managed by someone who knows what they’re doing.
6. Reconciliation: The more channels you add, the more cmplex the bookkeeping task becomes. You may need to add resource to account for the additional paperwork.

Many of these roles can be outsourced or managed in house while automation can make some of them much more efficient freeing up time and reducing you salary overhead.