4 Things to do to Make More Money for Your Business


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Presentation at the 2012 Yahoo! Merchant Summit detailing the four things merchants should do to make more money for their businesses. This presentation was included in the YMS 2012 panel "Driving Operational Optimization and Efficiency."

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  • The great news is Tim’s business has continued to grow and expand. In addition to benefiting from the overall growth of e-commerce, they now:Have multiple eCommerce sites using Miva Merchant with some shared inventory between the sitesBegan selling on third-party marketplaces including Amazon and eBayHave more sales from shoppers who received emails or shop online, but want to purchase over the phoneIn addition to expanding their channels and overall online sales growth, Tim has also needed to have a much more complete and flexible inventory of products. This includes:A dedicated warehouse supporting both retail store and online sales demandUse of vendor managed inventory (drop-shippers) for a portion of the productsOccasional use of retail inventory to minimize online back ordersUse of FBA for many of the products sold on the Amazon marketplaceTim’s business is not unique. In fact, earlier this year we surveyed 10,000 mid-sized online and multi-channel merchants and found that:53% had offline sales channels (stores and call-centers)36% have more than 1 website with shared inventory69% include marketplaces as part of their channel strategy67% have a least single warehouse62% use drop-shippers – averaging 26% of inventory drop-shippedThe downside of this success, is a much more complex operation and the need to continually find ways to be more efficient.
  • In addition to the increased complexity and complexity of more channels and more methods of managing inventory and fulfilling orders, multi-channel merchants are challenged with managing the balance of minimizing the cost to manage and fulfill orders against maximizing customer service and satisfaction.Operational Cost – well-know and straight forward, constantly changingCustomer Satisfaction – continues to evolve as customers expectations increase regarding:Minimal back orders and consistent product availability across channelsCompetitive “landed price” including shipping and feesTimely fulfillment – 3/5 days is now standard and 2 days is becoming more commonOrder accuracy and consistent communications from confirmation, to processing, to shipped, to tracking is now the standard
  • 4 Things to do to Make More Money for Your Business

    1. 1. 4Driving Operational Optimization and Efficiency Wednesday, August 8, 2012 @caseycarey #ysummit
    3. 3. • procurement and sourcing • carrying and warehousing operational • fulfillment and shipping costs • customer service costs • product availability • landed pricecustomer • order-to-delivery durationsatisfaction • order accuracy • communications
    4. 4.  Every channel is different, avoid selling everything, everywhere1  Manage it like a portfolio – determine the optimal mix of channels and products  Key factors to consider › Predominate audience available in the channel › Competitive landscape › Prices points and basis of competition › Overall product economics › Product affinities (does it “make sense”) › Control over brand, messaging, and service › Impact on current operations  Continually test new products and categories  Leverage technology to reduce complexities of product information and inventory across channels
    5. 5.  65% of mid-sized merchants use drop-shipping with an average2 of 26% of inventory source fulfilled  Expand product selection without the risk › Test new products and categories › Improve economics of marginal products › Good alternative for long-tail products (low-volume)  Improve margins › Reduce distribution and fulfillment costs › Consider hidden costs such as splitting orders  Increase customer satisfaction › Fulfill back-orders › Multi-source top sellers › Improve services levels › Maintain control over customer service and communications  Ensure each vendor can perform to your expectations
    6. 6.  For inventory listed on Amazon, a no-brainer3 › Increased sales by FREE Super-Saver Shipping and Prime eligibility › Preferred listing positions and higher price points › Lower landed costs, improved margins › Leverage Amazon’s best-in-class fulfillment (picking, packing, and shipping) and customer service  For multichannel inventory (eBay, ecommerce stores, etc.), it may reduce costs for some or all of your products › Not all products are candidates • Product categories and types • Sufficient turn rates and margins › Evaluate supplier shipping direct to Amazon to reduce costs further › Use the calculator on sellercentral.amazon.com to determine economic viability
    7. 7.  Integrate and process orders from all channels in one place4  Automate processing flows – manage by exception  Create “one view of the truth” › Order states › Inventory and products › Customers › Channel performance  Integrate everything so you can focus on selling rather than using technology › Product and inventory information › Orders from all channels (changes, cancels, back orders, etc.) › Shipping and warehousing › ERP/financial systems
    8. 8. ccarey@monsooncommerce.comcaseykcareycaseycarey