Selling on Amazon & eBay Marketplaces E-commerce Team Meeting, by Rick Wingender
Upcoming SlideShare
Loading in...5
×
 

Selling on Amazon & eBay Marketplaces E-commerce Team Meeting, by Rick Wingender

on

  • 568 views

This presentation was given to the ecommerce team to update them on what (and why) we were proceeding with the Virtual Marketplaces Project, including partnering with Channel Advisor. -- Rick ...

This presentation was given to the ecommerce team to update them on what (and why) we were proceeding with the Virtual Marketplaces Project, including partnering with Channel Advisor. -- Rick Wingender

Statistics

Views

Total Views
568
Views on SlideShare
564
Embed Views
4

Actions

Likes
1
Downloads
7
Comments
0

2 Embeds 4

http://www.linkedin.com 3
https://www.linkedin.com 1

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Many people have the perception that eBay is just for small sellers, selling auction items, and that it’s junk. <br /> …not just generic stuff <br /> …not just auctions <br /> …not just mom&pops…. <br />
  • This is the face of Jewelry Television on eBay today. It doesn’t look bad, but there are structural / design limitations to how creative we can be on eBay. <br />
  • We will create a whole new selling channel, called the “3PV Marketplace Channel”. JTVonline on eBay is the first “store” in that channel. This will be supported by a team within E-Commerce called the “Virtual Marketplace Team”. (3PV = 3rd-party Virtual) <br /> The “vision” is about “Extending The Reach”. Instead of SPENDING marketing dollars to acquire new customers, we can use these virtual marketplaces to MAKE money while acquiring new customers <br /> We are targeting customers who otherwise would not have shopped at JTV.com or our TV shows <br /> Incremental sales is a secondary mission; it’s not primarily a sales channel, because we’re not actively encouraging repeat sales on eBay and other sites. Instead, we drive them to Jewelry Television shows and JTV.com <br /> JTVonline is NOT just for liquidation product! It is not an auction site. These are fixed-price sales (mostly) <br /> From Craig: <br /> this year&apos;s Search budget: $2.3mm <br /> New customers as a % to ttl: 10-12% <br /> Cost to Acquire: $90-$120 (depending on seasonality) <br />
  • Our goal from Day 1 was to become a “Top Rated Seller”. Why? <br /> Better Placement in Search Results <br /> 20% Discount on Final Value Fees. <br /> Greater credibility & trust with potential customers. <br />
  • Our goal from Day 1 was to become a “Top Rated Seller”. Why? <br /> Better Placement in Search Results <br /> 20% Discount on Final Value Fees. <br /> Greater credibility & trust with potential customers. <br />
  • Listings-to-Sales forecasting ratio is estimated based on current base of listings and expected benefits from “networking effect” that 15,000 listings will provide. Not included in the estimated ratio is the potential increase from allowing international sales and from accepting additional pay types other than PayPal. <br />
  • ** This is a important talking point. We know we probably lose sales due to out of stocks, but can’t quantify this. We know products often sell in “bunches” because of how Best Match works. When a listing sells out, it disappears from eBay, so there’s a strong likelihood that we would have seen more sales if the listing had remained up. We’ve seen multiple sales kill listings many times. <br />
  • ** This is a important talking point. We know we probably lose sales due to out of stocks, but can’t quantify this. We know products often sell in “bunches” because of how Best Match works. When a listing sells out, it disappears from eBay, so there’s a strong likelihood that we would have seen more sales if the listing had remained up. We’ve seen multiple sales kill listings many times. <br />
  • SMB <br />
  • Each of these should be considered a Critical Success Factor. <br />
  • Each of these should be considered a Critical Success Factor. <br />

Selling on Amazon & eBay Marketplaces E-commerce Team Meeting, by Rick Wingender Selling on Amazon & eBay Marketplaces E-commerce Team Meeting, by Rick Wingender Presentation Transcript

  • E-Commerce Team Meeting, 2/17/2012
  • “The driver of Amazon’s profit is its Marketplace.” “Amazon reports that these products are 34% of all units sold on the website.” “Companies such as Buy.com and Walmart have introduced marketplaces, and we anticipate others in verticals such as apparel, toys, and sporting goods will follow suit. This strategy will help them retain some of the market share they may otherwise lose to Amazon.” Sucharita Mulpuru, Vice President, Principal Analyst, Forrester Research, Inc. Forrester’s “Five eCommerce Trends to Watch in 2011”
  • eBay is…  Brands  Fixed-Price  Large Merchants
  • The Vision  We will create a whole new selling channel, called the “3PV Marketplace Channel”.  The “vision” is about “Extending The Reach”. We are targeting customers who otherwise would not have shopped at JTV.com or our TV shows  Incremental sales is a secondary mission; it’s not primarily a sales channel, because we’re not actively encouraging repeat sales on eBay and other sites.  JTVonline is NOT just for liquidation product!
  • New Customers  New customers will come from various marketplaces  Some of them will subsequently purchase from JTV.com because of: • Selection • Promos • Content • Financing  W expect that over 60% of e our marketplace customers will have no history in Jupiter #170 on Internet Retailer 500 List
  • #1 on Internet Retailer 500 List
  • #6 on Internet Retailer 500 List
  • #7 on Internet Retailer 500 List
  • #12 on Internet Retailer 500 List
  • #27 on Internet Retailer 500 List
  • #32 on Internet Retailer 500 List
  • New Customers  Our listings and store presence clearly show who we are  Our packages go out with current marketing materials (collateral)  We include discount codes for JTV.com to encourage subsequent purchases from JTV rather than eBay, Amazon, etc.  Our expectation for the long-term is that over 60% of “Marketplace” customers will be new to JTV  In the future, we can sell Gift Cards on eBay for JTV.com
  • Learning  We now have meaningful experience in selling on eBay  We’ve learned from past mistakes in selling on Amazon  We have been running a very successful pilot program since June, 2010.
  • Top-Rated Seller  Achieving and maintaining this designation is a Critical Success Factor (3 main reasons)  We are carefully cultivating a positive reputation on eBay  Every customer sees this on every product details page. This helps us gain credibility and trust, and helps us build a brand
  • Top-Rated Seller “★`*•.¸*•¸★ Great Seller! Super Fast Shipping! Thank you! ★¸•*¸.•*★“ “Man what a buy and service-WOW!!! Will buy again, Thanks !!!” “100% Perfect Transaction.....Recommend to All.....Thanks jtvonline”
  • Financial Assumptions Pro Forma NR and GM Items Average Selling Price Product Markup % Average Monthly Listings on Ebay Average Monthly Listings on Amazon Average Monthly Listings on Buy.com Return Rate % (by revenue) Shipping Income per Order Outbound Shipping Cost per Order Operational Handling Cost per Order Sales/Listings Ratio Fees Expense Final Value Fee Ebay (variable) Final Value Fee Amazon (variable) Final Value Fee Buy.com (variable) Listing Fee (variable) Monthly Ebay Subscription Fee (fixed) Paypal Fee (variable) Salaries and Wages Expense % of VBM's Time VBM Expense Number of monthly listings per worker Number of Workers (calculated) Average Annual Worker Salary Annual Cost of Workers General and Administrative Expense Annual Fixed Channel Advisor Fees % of Gross Revenue paid to Channel Advisor (variable) $ $ $ $60 55.00% 1,100 10% $ 6 $ 1 $ 20.00% $ $ $ $ Baseline Yr 2 $66 55.00% 11,000 7,783 3,617 10% $ 2 $ 1 $ 25.00% $66 55.00% 15,000 15,000 15,000 10% 2 1 25.00% 0.05 $ $91 1.80% 7.83% 19.00% 15.00% 0.03 $ $341 2.00% 7.83% 19.00% 15.00% 0.03 $341 2.00% 25.00% 21,250 $ 1,100 1 35,000 $ 35,000 $ 25.00% 21,250 $ 6,000 4 37,500 $ 150,000 $ 25.00% 21,250 6,000 8 37,500 300,000 $ 0.00% 12,300 $ 1.75% 12,300 1.75% 8.13% $ Baseline Yr 1
  • Financial Model Net Revenue Total COGS Gross Margin GM% Pro Forma Baseline Yr 1 Baseline Yr 2 $ 142,560 $ 3,997,728 $ 8,031,150 $ 85,637 $ 2,118,796 $ 4,256,510 $ 56,923 $ 1,878,932 $ 3,774,641 39.9% 47.0% 47.0% Total Salaries and Wages Expense Total General and Administrative Expenses Total Expenses $ $ $ 58,890 $ 17,481 $ 76,371 $ 238,450 $ 717,442 $ 955,892 $ 456,250 1,492,477 1,948,727 Operating Income OM% $ (19,448) $ -13.6% 923,040 $ 23.1% 1,825,914 22.7% •Financials represent the first full year of Ebay sales after Channel Advisor implementation (sales ramp imbedded in numbers). FY14 has even greater financial potential, as business matures and completes rampup and roll-outs to all marketplaces •Financials exclude potential $250k spend on outsourced IT labor. •Economics of Ebay selling channel are heavily weighted towards variable expenses (pay with performance). •Vendors such as Gemstone King ($1M revenue per month) demonstrate JTV’s potential in this channel.
  • Financial Projections Highlights (FY13) Additional Talking Points  Expenses are mostly variable  Virtual SKU & Drop-ship capabilities add significant upside to the Marketplace channel  The Marketplace channel could add significant upside to a future gift card program  FY14 has even greater financial potential, as business matures and completes ramp-up and roll-outs to all marketplaces  Experience from marketplace participation could help JTV launch its own marketplace program in the future, with other retailers paying fees to JTV. “America’s Online Jewelry Mall”  New Customer expectations….
  • Unmodeled Upside! Our financial models are very conservative, and don’t include upside from:  Future revenue from new customers  Future international sales (Amazon, eBay, and Buy.com all can give significant international exposure)  Future potential marketplaces not included in model (Sears.com, Walmart.com, Overstock)  Future revenue from virtual SKUs / drop-shipping program – unlimited potential!  Additional eyeballs driven to JTV TV shows  Long-term plan: Hosting our own JTV marketplace, where WE collect listing & selling fees! (Crawl, Walk, Run)  New email addresses / subscribers
  • Additional Benefits / Routine Sales Referrals back to JTV.com! This data only includes web visitors who came directly from eBay (excludes those who came to JTV.com indirectly or later)
  • Additional Benefits / Web Traffic Referrals to JTV.com    Referral web traffic results in traffic and sales to JTV.com This data only includes web visitors who came directly from eBay (excludes those who came to JTV.com indirectly or later) This is an improvement over previous years; and is expected to dramatically increase as listings increase. August 2011 vs Nov 2009 Then Vs. Now
  • Marketplace Integration Partner Advantages of Integration & Automation  Scalability: •  Increased sales and new customers: Go from 1,000 listings to as many as we want, almost instantly Elimination of most or all current manual processes Costs are almost all variable • • Elimination of: • “Separate” inventory (and operating space), leading to lower inventory shrink risk • Time-consuming, manual initial product selection and pull process • Time-consuming, manual replenishment process • Lost sales due to out-of-stocks. **(see speaker notes)
  • Marketplace Integration Partner Advantages of Integration & Automation  Enables: • • • • • • • • New route to international sales through Amazon and eBay international sites Additional exposure for closeout / liquidation inventory. Order fulfillment by the WMS and Fulfillment team (leads to shipping expense reduction of > $4/box using UPS SurePost) Marketing. We will acquire many new email addresses which we can use for marketing campaigns (need Subscription Center integration on eBay landing page) Automatic maintenance of price & cost data Additional & better business reporting via Channel Advisor Additional customer screening and fraud prevention measures via eBay and PayPal results in less-risky transactions/customers Organizational knowledge learned from each marketplace could enable JTV to open its own marketplace site in the future – resulting in a steady revenue stream without ever touching product
  • Marketplace Integration Partner Disadvantages of Automation & Integration  We currently re-write all product titles and descriptions; not possible when       listing 15,000 items Titles and descriptions, as written in SKU Creation application, are inadequate for eBay Best Match search algorithm. Need solution Shipping speed will slow down, potentially hurting our shipping DSR scores Returns process becomes part of Returns dept, potentially hurting our communication DSR scores Returns process FVF fee recovery will still need to be handled by ECommerce team Manual ship process has advantage of better pre-shipping product inspections, lowering return rates Integration will require data feeds including image serving, and changes to BI reports, WMS systems, Jupiter, Returns system, other systems
  • Marketplace Integration Partner Ramp-up Plan  Integration Project to take 6 months.  Start out with focus on eBay. Over time….Learn, add staff, add listings, add marketplaces  CA can currently integrate with eBay, Amazon, Buy.com & Pixmania.com. They are working on Sears now (ETA, summer 2012) , and negotiating with Walmart. Others could be in the future  CA gives us the ability to use Amazon and eBay internationally  See handout that details estimated timing for addition of new marketplaces and increases in listings
  • Appendices
  • 3PV Marketplace Channel Growth Plan ** $66.10 FY14 FY13 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Expected ASP eBay Listings 1400 1500 1600 eBay Gross Sales 1700 1800 $ 29,745 2000 33,050 3000 49,575 4000 66,100 6000 99,150 8000 132,200 10000 165,250 12000 198,300 14000 231,350 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 25% Staff Count Sales-to-Listings Ratio Amazon Listings Amazon Gross Sales 0 0 1 1 1 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 100 200 $ 3,305 300 4,958 400 6,610 400 6,610 1000 16,525 2000 33,050 3000 49,575 6000 99,150 9000 148,725 12000 198,300 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 1 ** Assumes May, 2012 Launch with Channel Advisor 6,000 Expected Listing Mgmt Capacity per Employee Buy.com Sears.com Walmart Staff Buy.com Gross Staff Sears.com Gross Staff Marketplace Count Listings Sales Count Listings Sales Count Listings Channel Advisor Implementation; project plan execution 1 Channel Advisor Implementation; project plan execution 1 Channel Advisor Implementation; project plan execution 1 1 1 1 1 1 1 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 Channel Advisor Implementation; project plan execution 0 $ 1 0 $ 0 1 0 100 1,653 1 0 200 3,305 1 0 1 300 4,958 1 0 1 400 6,610 1 100 1,653 1 400 6,610 1 200 3,305 1 1000 16,525 1 300 4,958 1 2000 33,050 1 400 6,610 1 4000 66,100 2 400 6,610 1 6000 99,150 2 1000 16,525 1 8000 132,200 2 3000 49,575 2 10000 165,250 2 6000 99,150 2 12000 198,300 2 9000 148,725 3 12000 198,300 2 12000 198,300 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 12000 198,300 2 15000 247,875 3 Walmart Gross Sales Staff Count 10% Total 3PV Listings Total 3PV Gross Sales Return Rate Total Staff NET Sa May 2012 Launch. 0 $ 0 0 0 0 0 0 0 100 1,653 200 3,305 300 4,958 400 6,610 400 6,610 1000 16,525 3000 49,575 6000 99,150 9000 148,725 12000 198,300 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 15000 247,875 1 The Sales-to-Listings Ratio predicts Unit Sales based on the quantity of listings in a given month. 2 This model shows how we would launch Channel Advisor with eBay as the first marketplace in May, 2012, then open new marketplaces with CA every three months. 3 This model shows how we will hire to support the level of listings activity, providing a one-month training period before adding more listings to the given marketplace. 4 This model shows 17,160 new customers in FY13; 23,400 in FY14. 1 1 1 1 1 1 1 1 2 2 3 3 3 3 3 3 3 3 3 3 2000 2300 3500 4600 7300 10500 13600 19300 25500 31600 37300 41400 46400 52000 57000 63000 66000 69000 72000 72000 72000 72000 72000 72000 72000 72000 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 33,050 38,008 57,838 76,015 120,633 173,513 224,740 318,933 421,388 522,190 616,383 684,135 766,760 859,300 941,925 1,041,075 1,090,650 1,140,225 1,189,800 1,189,800 1,189,800 1,189,800 1,189,800 1,189,800 1,189,800 1,189,800 3 3 3 5 5 5 8 8 9 10 10 11 11 12 13 13 14 14 14 14 14 14 14 14 14 14 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1 1 2 2 3 4 5 6 6 7 8 9 9 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0
  • Presented to
  • ChannelAdvisor Highlights • Manage $2.6B in Gross Merchandise Value (GMV) through the ChannelAdvisor Platform yearly • Process a transaction every second through the ChannelAdvisor platform • Used by more than 3,000 customers globally, including 160 of the Internet Retailer Top 500 – The largest e-commerce solution provider to Amazon, eBay and Buy.com – Named by Internet Retailer: • The #1 Most-Used Marketplace Solution to the Top 500 Retailers • The #1 Most-Used Comparison Shopping Solution to the Top 500 Retailers • The #2 Most-Used Paid Search Solution to the Top 500 Retailers • The #2 Most-Used Rich Media Solution to the Top 500 Retailers • Headquartered in Research Triangle Park, NC – Offices in Atlanta, New York, Seattle, London, Berlin, Melbourne and Limerick – More than 300 employees worldwide
  • Consumer Shopping Landscape 151 million active consumers across eBay, Amazon and Buy.com Americans log more than 9.6 billion searches per month Your Customers 55% of online purchases are influenced by a comparison shopping engine
  • ChannelAdvisor Platform – One Feed
  • Featured ChannelAdvisor Customers
  • ChannelAdvisor Marketplaces A Few Customers…
  • ChannelAdvisor Premium Marketplaces - Launch Plus Services Why Us? Customer Success 1 Reduced labor with regard to initial category mapping, listing schedules and posting template setup.  2 Accelerated launch time frame 3 Application of industry best practices 4 Hands on product training Resource Allocation during Launch Plus Timeline Transition point in which customer assumes full management. Launch hand-off Month Start of Launch. Kick-off Launch 4-6 week process. Includes items listed in scope. eBay & Amazon launch deliverables are different. Goal: To expedite your launch by doing more hands on setup work during this time period. You will be required to participate by shadowing this process and learning from the training documentation so you are able to assume full management after launch hand-off.
  • Transactional Data Process Flow For Marketplace Orders
  • Risk Factors Each of these points is a Critical Success Factor on eBay.  4 Risk Types: People, Product, Policies, & Technologies.  People: • Ability to hire quality staff. This is a higher-caliber person than a call-center rep. Product knowledge, merchandising & business knowledge, margin requirements, must understand multiple systems (ebay, CA, Jupiter, etc), SEO / Best Match, writing ability, problem solving, correspondence, etc. • Individual productivity estimates. Expected case = manage 6000 listings per person • Sales volume surpassing ability to respond to customer issues, which would result in poor DSR scores, imperiling the business. Long-term consequences. • Our ability to train & get SKU Creators to write better, SEO-friendly product titles and descriptions  Product: • Product Titles and Descriptions (SEO / Best Match Optimization)
  • Risk Factors Each of these points is a Critical Success Factor on eBay.  4 Risk Types: People, Product, Policies, & Technologies (continued)  Policies: • Changing away from free shipping policy. Must have! • Changing free returns policy / inclusion of UPS or free Newgistics returns labels • Losing physical access to product, to answer questions not answered by our product listing data. This has been invaluable in creating sales and getting great feedback  Technology: • Technology risk – Daily feeds to / from Channel Advisor must happen; maintenance must happen • Large-scale processing of Returns FEE transactions may or may not be automated by CA. TBD • Our ability to make modifications to internal systems and reports (BI input needed) • Need to resolve problem of customer notes on eBay orders (they won’t show up in our systems) • Depends on two existing SE projects: Payment Tolkenization and Multiline / Sales Channel order identification.
  • New Customers In the future, we can sell Gift Cards from eBay, for use on JTV.com:  Promoted in each listing  Promoted in a merchandising “content slot” on our store home page  Promoted in our eBay emails  Promoted in our shipping emails $100
  • Project Charter  Project Statement of Work (SOW) This project will be called the “3PV Marketplaces Project”. This project requires the integration of Channel Advisor’s (CA) Marketplace service offering into JTV’s systems via XML feeds over CA’s APIs, for the purpose of automating data feeds to and from CA, enabling JTV’s operation of online marketplace stores on eBay.com, Amazon.com, and Buy.com. The project requires modifications to certain JTV systems, including, but not limited to: Jupiter, Order Management System, reporting systems, Oracle transaction tables, and the JTV WMS & Moku.  Business Case This project enables Jewelry Television to accomplish two objectives: 1. Develop an incremental sales channel to increase revenues; 2. Acquire new customers for JTV’s other sales channels.