Updated: Sep 5, 2020
Brands 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
Very few specialised companies operating exclusively in this space – where their only business is to operate branded online stores
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
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
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
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.