This post is by Trevor Ginn, the founder of VendLab and Hello Baby.
Ecommerce has been around for over twenty years, but in many ways the manufacturers of products which are sold online are yet to adapt.
Online retailers have different requirements from bricks-and-mortar shops, yet the products and service they receive from their inventory suppliers (brands, manufacturers, distributors and so on) are generally still tailored to retail stores.
Here are seven ways suppliers fail online retailers, which I have seen time and time again. Be on the lookout for them!
1. Not delivering in “solids”
In retail, a solid is a wholesale case where all the items it contains are identical – the same color, size, style and so on. But to save retail shelf space, some products are delivered in mixed packs.
Whilst this may look great in a shop, it is of no use to an online retailer as it does not allow them to order the exact items they need. So as not to be left with a pile of one color that no-one wants, items purchased in mixed styles really need to be sent out in mixed styles to customers. That is far from ideal, as it can really upset customers who expect to receive an item that exactly matches the image they saw online.
My advice
It is a poor customer experience to not send out exactly what is ordered, so in many cases products which are not delivered in “solids” should be avoided. One alternative is splitting the items when they are received, but this is also not ideal as color variants are rarely equally popular. Suppliers might be able to split cases for ordering, so remember to ask.
2. Items without individual barcodes
A barcode (also known as an EAN or UPC) should uniquely identify a product, both in terms of listing on marketplaces such as eBay and Amazon, and for warehouse stock control.
However, some suppliers use the same barcode on multiple items (usually variants – see above), or just use no barcodes at all. This causes stock-taking issues, because you can’t tell one variant from another, and also listing issues on marketplaces, where barcodes are increasingly expected.
My advice
For listing purposes, it is possible to buy barcodes and assign them to products, but it is a bit of a pain. Be careful doing this for Amazon listings, as they are now checking that the registered company for the barcode matches the brand of the product itself, and can suspend listings where it doesn’t.
Warehousing systems such as Peoplevox allow barcodes to be created in the system, which solves the problem of uniquely identifying products in your warehouse. But it creates an admin overhead, as all items without barcodes will need to be labeled upon delivery.
3. Packaging unsuitable for posting or returning
Many products are delivered in retail presentation packaging. This looks great on the shelf but it is delicate and difficult to pack. These products are also hard to remove from their packaging without damaging them, so when they are returned they cannot be sold as new.
Manufacturers also rarely take into consideration that the size of a package affects how much it costs to post. For example in the UK if a package is small enough to fit into the Royal Mail Large Letter band the postage price is about a third of the cost. Often items could fit into this band if they were just packaged differently. Furthermore, international shipping is charged by weight, so less packaging will also save the retailer money when selling cross-border.
What is required is:
- Ship-ready packaging. It would save time and money, and reduce waste if products were delivered in ship-ready packing which would just require a postage label.
- Smaller packaging, designed with postage size bands and minimizing weight in mind.
- Easy-return packaging where the item can be easily removed and replaced in the packaging.
My advice
There has been some progress on these issues, mainly driven by Amazon though its “frustration-free packaging” scheme.
In my experience, some products are available in more ship-friendly packaging (make sure you ask) but this is the exception rather than the rule.
4. Poor descriptions and images
Manufacturers frequently provide very poor stock descriptions and photos which makes it difficult to create high quality listings. Structured product attribute information is becoming more and more necessary online, but it’s difficult for small retailers to generate. How is a retailer supposed to know what a product is made from, for example, if this information is not supplied by the manufacturer?
With the rise of mobile, high quality images are becoming more important, and eBay and Amazon are recommending images of around 2,000 pixels wide. However, images from suppliers mostly fall way short of this standard.
To make product listing creation simpler, suppliers should provide product data in an easy-to-process format such as a spreadsheet referenced by MPN or barcode, with as much data as possible about the product. Many suppliers seem oblivious to the needs of online retailers and suggest, for example, that they just copy the information from their website – which is incredibly time consuming.
My advice
Push suppliers to provide the best data that they have. When image quality is too low, or only one image is provided, sometimes higher quality or additional images can be found on their own website or Amazon.
5. Out-of-date product information
Customers who purchase online want the exact product which is described and pictured. Small details like stitching color and logo design matter to some customers and are a frequent source of negative feedback if they are not exactly how they expected. However, often a retailer will only discover that a product has changed when there is a complaint from a customer.
To make matters worse, suppliers sometimes deliver old and new products together for a period of time until they have used up their old stock. For example, one of the suppliers to my company Hello Baby changed their name and branding from Sunshine Kids to Diono. For a long period we did not know which branding was going to be on the products we received. The products were precisely the same, but try telling that to a customer who expected a different brand!
My advice
Ask the supplier if they make any product data available to download though a service like Dropbox, or have a way of providing news about new and improved products such as a product marketing newsletter.
6. Price fixing
Selling online can seem like a winner-takes-all situation where the seller at the top of the search results, or in the Amazon Buy Box, gets the lion’s share of the sales. Price is a major factor in search ranking, so getting the most sales often leads to price wars and a race to the bottom.
Many brands view selling below the list price (MSRP/RRP) as damaging their image and hurting all their retailers. There is much truth in this, and in the US brands often seek to control pricing by having a Minimum Advertised Price (MAP). In the UK it is hard to see a way to control pricing which does not fall foul of anti-competitive rules. This does not stop many suppliers from breaking the law by insisting that retailers stick to their list prices.
My advice
If you are in the UK you can point out that price fixing is illegal, but don’t expect it to make a difference!
7. Restricting channels
Despite marketplaces representing an increasing proportion of online sales, there is still an enduring prejudice against them. Many brands do not allow their products to be sold through online marketplaces at all.
In my view these companies are shooting themselves in the foot, as online marketplaces make up a double-digit percentage of online sales. They are growing faster than ecommerce overall, and much faster than bricks-and-mortar retail. If their products are not available on popular channels like Amazon and eBay then customers will just buy something else.
My advice
It’s worth explaining the case for selling through online marketplaces to suppliers who are resistant to the idea. You could even suggest an exclusive relationship, which would help them retain control as well as benefit you – but don’t be surprised if their position remains fixed.
Any questions, comments or stories of your own? Let me know in the comments below.
This post was by Trevor Ginn, the founder of VendLab, a retail consultancy which helps retailers and suppliers create, optimize and manage their product data.
Trevor is also the founder of online retailer Hello Baby, which has been selling baby, toddler and nursery products worldwide since 2007.
Trevor, this is a great, short, to-the-point list - especially since we online retailers could write a BOOK about this topic. When I read this article, I thought, "yup, so true". Unfortunately, I think that most of the people who are reading - and "getting" - this article are indeed online retailers. I'd love for you to re-title and re-package this article into something that would help brands and manufacturers read it and actually recognize themselves! Something that would make them stop and say, "Hey, this article is about how I can increase sales by changing how I approach online retailers!"