Friday, 28 February 2014

The Value Chain

Competitive Advantage: Creating and Sustaining Superior Performance is a book written by Michael Porter. Within his book he talks about the value chain. 

The use of the value chain analysis described the activities an organisation carries out and how they relate to the organisations competitive position. 

Basically it works what the value is of each activity in relation to the products or services. It brings awareness to the fact that a business isn’t just a piece of machinery or the team or even the amount of money it has in the bank, it’s the sum of all these parts when each one is arranged into a system that works for the benefit of the businesses to give it a competitive advantage.

There are primary and support activities. The primary activities directly relate to the creation or the delivery of the end product or service, they include:
  • Inbound and outbound logistics
  • Marketing and sales
  • Operations
  • Service
They are all linked by the support activities that are used to improve the efficiency and success of each of the primary activities. The four support activities include:
  • Procurement
  • Technology development
  • Infrastructure
  • Human resource management 
All of these activities are related so the organisation is able to realise the profit margin. If the parts in the value chain aren’t managed efficiently, the profit margin will be affected.

Thursday, 27 February 2014

Shipping Insurance Savings

Online shopping is growing rapidly and this means there is a high demand for reliable shipping to customers that could be located all over the world. 

Finding a reliable provider is vital for retailers, those who have experienced lost goods and damaged inventory know this only too well. Retailers have a couple of options, they can trust a provider and hope everything arrives perfectly or they can play it safe and take out insurance on their shipments.

Insurance really is essential for businesses but there is a risk of paying over the odds due to industry mark ups. Added costs charged by the provider are often overlooked, but the cost of these small fees can quickly eat into the bottom line when shipping thousands of products. There is an alternative, third party insurance for shipping is an excellent way of saving money and protected your shipments without paying too much. Sadly, many retailers are unaware of this option and so they continue to pay the extra costs through their couriers.

Shipping insurance should be worked into your businesses’ operating costs. There are ways of insuring your goods and reducing the overhead costs if you look at the third party options. When every penny counts a small change in how you insure your shipments could mean a big saving for your company. That’s something that seriously needs investigating don’t you think?

Wednesday, 26 February 2014

The Different Type of Samples

Today we’re continuing our topic from last week post, looking at the remaining five sample types. If you missed part one, please check back on our blog to catch up.

fashion sample
Size Set Sample
The size sample set is used to allow the buyer to check that the factory is able to make the garment in different sizes. The factory should use the actual fabrics and the buyer would usually be shown one or two samples of each size being made.

GPT Sample
The GPT stands for garment performance test, which allows the buyer to check how the garment performs during chemical and physical testing. The most common tests include: shrinking, colour fastness and the strength of the seams. These samples are normally inspected by a third party with the results sent to the buyer and the factory.

Pre-Production Sample
The PP sample is the contract between the buyer and the factory, made from all the original fabrics and matching the actual in printing, embroidery and the washing. Once approved the bulk production can start.

Wash Sample
The buyer will check the wash sample to assess how it feels and handles after being washed. If this sample isn’t approved the factory may have to send a second sample or adjust the washing program suggestions.

TOP Sample
The Top sample is the top of production, it’s sent to the buyer once the first few pieces are fresh out of the sewing line. The samples come with suggestions of the QA department and the manufacturing style is evaluated. This sample is also checked for the packaging and the buyer can see if the bulk production of the ferment is the same as the approved samples.

Shipment Sample
Some buyers ask to see the shipment samples. These are assessed so the buyer is able to check over the actual shipped dispatch.
As you can see the sample process is detailed and intensive, but necessary to assure the final products are up to the set standards expected by the buyer and the end customers.

Tuesday, 25 February 2014

About Courier Insurance and Why We Need It?

Courier insurance is there to give couriers protection for the packages they transport. There are risks that couriers face that aren't covered by the usual insurance policies which are why courier insurance is required. There are different policies available for anyone that carries the goods belonging to other people for what is known as ‘hire or reward’. It’s essential that if you have employees in courier roles they are provided with the right policies that will protect them, the cargo they’re transporting and the vehicles being used against damage and other potential risks.

Why Courier Insurance is Necessary
When transporting goods the couriers drive long distances, covering extensive miles and transport goods that vary in value. If something was to happen to the cargo or the drive there could be huge replacement or repair costs involved. If you didn't have the correct cover while transporting goods the usual insurance policies would not agree to pay out to cover any costs involved which could mean the end of the company. Therefore you have to have essential courier insurance within your business that will cover at least the following:
  • The couriers
  • The vehicle damage
  • Public liability
  • Employer’s liability
It’s your duty to protect your employees and the cargo as well as the vehicles. Don’t leave things to chance, it’s a very risky businesses.

Monday, 24 February 2014

What You Need to Know When Mailing Artwork

No one wants to unwrap a piece of art to find it’s been damaged. If you’re using a courier to transport artwork here’s how you can protect it.

Unframed Artwork
  • Cover both sides of the artwork with some acid-free paper and secure the corners with tape
  • Place two pieces of cardboard to an inch bigger than the artwork and place the artwork between the two pieces, securing the bottom and the sides together with tape. Use as much cardboard as you need to on either side to ensure the artwork won’t slip and slide inside.
  • Place the protected artwork inside a cardboard package and ensure it cannot move around inside
  • On the outside of the package write “DO NOT BEND” in large print on both sides.
Framed Artwork
  • Buy a suitable mirror box for shipping, which is usually used to send mirrors. Make sure it is big enough to leave a three inch space between the frame and the box.
  • Cover the frame using tissue paper to protect the edges of the frame as well as the glass and secure the paper with tape.
  • Wrap the entire frame in bubble wrap and secure it with t ape.
  • Put some parcel peanuts in the bottom of the mirror box. Place the wrapped frame into the mirror box and fill up the rest of the space with the parcel peanuts, ensuring the edges of the frame are not in contact with the box and tape the mirror box closed with suitable packaging tape.
  • It’s a good idea to take out insurance to protect your artwork, especially if the work is valuable.
Image Source: Supertrooper,

Friday, 21 February 2014

Fashion Logistic Trends

Fashion is ever changing with new supply chain challenges arising all the time. There is fierce competition as well as fluctuations in customer demand and these result in the need for creativity and quick responses in the supply chain. Here are some of the trends in fashion logistics and how they impact on the supply chain.

Ecommerce – Ecommerce is growing more powerful and important each day, especially due to the rise in mobile users. Customers want to buy quickly and sensibly, often on the go. They compare prices and judge the buyer experience. They expect convenience as well as free or cheap delivery and click and collect is growing in strength.

Returns – Returns need to be processed quickly to ensure the availability levels are maintained. By working through the returns at a fast rate it’s easier to ensure the products can be resold at full price rather than being marked down.  Allowing returns to the store is often useful as it can create new buyer opportunities and additional sales being created.

Retail and Inventory Levels – Inventory levels need to be maintained especially when selling over multiple channels such as a physical store, outlet shops, websites and to wholesale customers. Stock must be managed efficiently and easily distributed from one channel to another.

Changing Markets – The market changes very quickly meaning today’s must have products can be dead in the water by tomorrow. Unpredictability requires a fast response and the ability for the supply chain to react at the drop of the hat as soon as the trends change, so there’s a need to reduce the time to market response with more collections and deliveries taken each year.

Vendor Managed Inventory – No one wants cash tied up in large amounts of inventory and as a result the demand for vendor managed inventory is on the rise. This requires improved visibility when it comes to the inventory and the responsibility of the product doesn’t stop until it has reached the end customer.

As a result of these trends vendors and retailers need to improve the visibility of their inventory. They also have to have a responsive supply chain that will ensure they meet the customer demands quickly.

Thursday, 20 February 2014

The Importance of Sampling: Fashion Merchandising

fashion merchandising
One of the main processes in garment manufacturing is sampling. It’s used to attract buyers and confirm the orders.  Buyers will often buy on the quality of the sample and therefore it’s a critical stage in fashion merchandising.  There are various types of samples; they vary from buyer to buyer as well as in the style such as:
  • Design development
  • Proto samples
  • Fit samples
  • Advertisement or photo shoot sample
  • Sales man samples
  • Pre-production
  • GPT samples
  • Size set samples
  • TOP sample
  • Wash sample
  • Shipment sample
The samples are sent to the buyer at each stage, this is so the approval can be provided at each stage. These are the common steps involved in sample but sometimes the buyer may wish to send feedback and suggest changes to be made at certain points. These points will then need to be worked in and made into a counter sample that will once again need to be sent for approval. 

Wednesday, 19 February 2014

The Different Types of Samples, and Why? Part One

fashion sampleYesterday we began looking at samples and the different types that are used to achieve sales and confirm orders. Today and tomorrow we’ll be looking at the different stages and why they’re used.

Design Development
This is the first stage which is either produce by the factory or the buyer. It is required to establish whether to proceed with the line or not.

Proto Sample
The proto sample is the initial stage and often this is the stage that receives the confirmation for the factory to go ahead. Factories often send the proto sample request to more than one factory which then submits the sample and price to receive confirmation from the buyer. More than one proto sample is usually requested and once approved the factory is able to work on the fit sample

Fit Sample
Fit samples are made to confirm the fit of the garment and to check the construction details for approval from the buyer. The actual fabric for the finished product is used too so the buyer can see the quality.

Ad or Photo Shoot Sample
The ad or the photo shoot sample is used for marketing such as in catalogues or on television or on websites.

Sales Man Samples
This sample is to be used to obtain orders from the retailers. The sample is of the actual fabric or accessory as the feel, look and quality is vital to achieve greater sales.
Return tomorrow for the final five sample types.

Tuesday, 18 February 2014

What to Prepare for the Future Development on Cold Chain?

It is possible to help reduce losses in the agriculture business by investing in cold chain logistics. Cold chain can be used to speed up the time it takes to get products from the field to the plate of the consumer, not only reducing the losses but also improving the variety of food that reaches the consumer. Certain products have to have their temperature managed in order to protect the goods and retain the freshness. High tech approaches are required for this and in the future it’s important to be prepared for:
  • Development – Development s required to reduce the amount of fruits and vegetables that go to waste every year. These products are suitable for human consumption but the logistical costs can be high. Development is required in cold storage to ensure it’s adopted by the masses.
  • Market Analysis – The demand for frozen foods, agricultural products, dairy and aquatic products are expected to rise. Quick frozen foods need to be stored below minus eighteen degrees, but the cold chain distribution service is yet to be in wide use.
  • Problems and Trends – Modern logistics needs to be able to react quickly to the market. They need to achieve this by integrating resources to optimise the logistics and the flow of the fund and information.
  • Image: Serge Bertasius Photography
  • Third Party Logistics – Third party logistics has been slow to develop the cold chain logistics services. Manufacturers have been relying on internal logistics or using partial outsourcing. As cold chain requirements are on the increase third party logistics providers need to recognise the advantages of developing temperature logistics.
Cold chain logistics needs to be regulated across the industry in the future. More facilities are required and the technology used for the low temperature control must be increased.

Monday, 17 February 2014

What are the Methods Used in Cold Chain Logistics?

cold chain
Image source: Piyachok Thawornmat 
Commodity chains from all over the world make use of the cold chain to ship their produce around the world. Temperatures are controlled to stop natural chemical reactions that can spoil the produce, but how is the temperature controlled to make it cool?

The various methods used in the cold chain include:
  • Dry Ice – Dry ice is solid carbon dioxide that can keep perishables frozen for long periods of time.
  • Gel Packs – Gel packs are commonly used for pharmaceutical items that need to be kept between 2 and 8 degrees Celsius.
  • Eutectic plates – Similar to the gel packs but filled with liquid
  • Liquid nitrogen – A substance that allows produces to be frozen for extended period of time and can be used for the transportation of biological cargo including organs.
  • Quilts – The quits are required to provide a buffer between the internal and external temperatures, allowing goods to remain at a stable temperature.
  • Reefers – A temperature controlled transportation unit such as a van or a truck. The unit is insulated and designed to keep the cargo inside at the right temperature.
  • Refrigerated containers - Containers that refrigerate the goods inside the container.
There are different methods used for the transport of food. Land, sea and air all have different operations but they all ensure the food remains fresh during transportation. The method used depends on the speed of the shipment. The innovations in packaging, coatings, bioengineering and techniques used to reduce food from perishing also have helped to ensure food remains fresh for the end consumers around the world.

Saturday, 15 February 2014

Useful Finance Metrics For Better Benchmarking

Accounts Payable

  • Cost per invoice (Total department spend [including allocated overhead] divided by the number of invoices processed)
  • Days payable outstanding (accounts payable divided by cost of sales) * Days)
  • Early pay discounts (percentage of invoices you can pay without paying the total invoice amount)
  • Percent of invoices paid within terms
  • Percent of duplicate or erroneous payments
  • Time to process invoices (Average time from when an invoice is received to when it’s ready for payment). Note: Don’t factor in actual payment time, since you probably do some strategic payment timing.
 Accounts Receivable

  • Average days delinquent (average number of days invoices go past due)
  • Beginning receivables + Monthly credit sales – Ending total receivables
    ————————————————————————————- x 100
    Beginning receivables + Monthly credit sales – Ending current receivables
  • Best possible DSO (Best Possible DSO = Current Receivables/Total Credit Sales X Number of Days)
  • Collections Effectiveness Index
  • Days sales outstanding (Total Accounts Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed)

  • Cost per payroll payment
  • Cost per payroll inquiry
  • Days to process new hires
  • Days to resolve payroll inquiries (Note: You could also use this in A/P with days to resolve vendor inquiries and in A/R for customer questions.)
  • Error rates
  • Number of manual checks cut

Friday, 14 February 2014

Chit Chat:St. Valentine’s Day

valentine's day
Image courtesy of 9nong/
St. Valentine’s Day falls on the February 14th of each year and is generally one of the most celebrated days around the world especially in Australia, Canada, France, Mexico, US, and UK.  People celebrate this day by sending candies, flowers, gifts and messages of love and affections to their family, friends and partner.  Other cultures in Asia also have their local Valentine’s Day or developed different traditions to celebrate Valentine’s Day.  Let’s look at a couple different Valentine’s Day celebrations around Asia. 

History of St. Valentine’s Day
Many legends surround that of Valentine’s Day but one popular legend mention that in the third century A.D, the Roman Emperor Claudius II, seeking to strengthen his army, pass a law forbidden young men from marrying because he believed that single men made better soldiers and would be more willing to enlist in his army than those with wives and families. 

The Priest Saint Valentine believed that people needed to get marry and began to perform secret marriage ceremonies for young lovers.  When Saint Valentine’s action was discovered, Claudius ordered him be jailed and put to death. While imprisoned, Saint Valentine cared for fellow prisoners and be friend the prisoner’s guard blind daughter.  It was said he also cured her blindness before he was executed. Many people visited him and threw flowers and notes to his jail cell for his sacrifice of love. The day he died on Feb 14th 270 A.D, he left a thank you note with his affections and signed it with “Love from your Valentine” which started the custom of exchanging love messages on Valentine Day. 

St. Valentine’s Day (February 14th) was not officially declared until two hundred years later but it was believed that the first to link St. Valentine’s Day with romantic love originated from the famous poet Chaucer in the Middle Ages which started the custom of courtly love, a ritual of expressing love and secret admiration. This practice spread through Europe and then later to the American colonies.  Stories grew about how female judges from the High Court of Love would rule on issues related to love on 14 February each year.  In the 17th century, people in Britain also started sending love messages in special handmade cards to express their affection and by 1840s, the American started selling mass produced valentines in the US.

Valentine’s Day in Asia

Japanese Valentine’s Day(s)
There are two Valentine’s Day celebration in Japan which was later adopted in South Korea and Taiwan. One on Valentine Day (Feb 14th) and the other on White Day (Mar 14th).  Back in the 1950’s, an American company started advertising Valentine’s Day chocolate to non –Japanese living in Japan at the time. Later, a Japanese company started to advertise Valentine’s Day chocolate too but somewhere along the way, the translation got mixed up and people thought that Valentine’s Day was an opportunity for women to express their love to men thus the tradition of female giving chocolates on Valentine’s Day began. White Day (initially called “Marshmallow Day”) was introduced as a gimmick by a Japanese confectionary company in 1977 who tried to market white marshmallows to men as gifts on March 14th.  The Japanese National Confectionery Industry Association thought it was a good idea to help increase revenue and in 1978 made the official announcement that March 14th would be known as “Ai ni Kotaeru White Day.”  The day for men to “answer/reply love” received from February 14th.

So on the February 14th; the female gives the gift to the male coworker, bosses, friends and family members and on March 14th, the male reciprocate the gift he received on February 14th with a “sanbei gaeshi” gift that is two or three times the value. Japan spends more money on Valentine’s Day than other countries with the United States coming in second. Japanese chocolate companies make half of their annual sales during the week before Valentine’s Day.

Unlike the western traditions, type and meaning of gifts usually falls on the following categories:
Giri choco (obligatory chocolate) given to friends, colleagues, bosses and close male friends
Cho Giri Chocolate (Ultra obligatory chocolate) given to unpopular people
Honmei choco (true love/ feeling chocolate) given to boyfriend, lover, husband and true love
Tomo choco (friend chocolate) given to female friends

Basic sweets and their meaning:
White chocolate – “Let’s be friends”
Chocolate Candy – “I like you”
Chocolate cookies – “I love you”
Handmade chocolate – reserved for serious significant other

Chinese Valentine’s Day
In China, aside from the western Valentine’s Day, there is also a Chinese Valentine Day.  The 7th day of the 7th lunar month on the Chinese calendar marks the Double Seventh Festival/ Seven Sister Festival (Qi Qiao Jie (七夕节)).  Like most folk tales that has been passed down from generations, there are many variations of this tale with the earliest tale dates back to the Jin Dynasty (256-420 AD). According to the legend, one of the seven daughters of the Goddess of Heaven caught the eye of a cowherd, Niu Lang during one of their visits to earth.  The seventh and prettiest daughter, Zhi Nu fell in love with Niu Lang  so she stayed on earth and got married.  They lived happily for a several years with their two children; Niu Lang would plant in the field while Zhi Nu weaved at home.  Eventually, the Goddess of Heaven missed her daughter too much and ordered her return to the heaven.  The mother took pity on the couple and allowed them to be reunited once a year.  It is believed that on the seventh night of the seventh moon, magpies (a kind of bird which symbolizes happiness / good fortune in the East Asian culture) would form a bridge with their wings for Zhi Nu to cross to meet her husband.

Unlike St. Valentine’s Day in Western countries, Chinese girls would prepare fruits, melons and incense as an offering to Zhi Nu, the weaving maiden and pray to acquire one wish. Single women would usually wish for acquiring high skills in needlecraft (an important quality men look for in a wife to have in the old days), to find an acceptable husband, or become prettier while married women would wish to give birth to more sons or for longevity.  In the evening, people gather around the outdoor to observe the stars.

What to Consider in Cold Chain Operations

There are always setbacks that can disrupt the successful transportation of food. Shipment integrity needs to be maintained throughout the entire chain, which involves:
cold chain

Shipment Preparation
The characteristics of the product being shipped have to be assessed. The produce usually needs to be at the desired temperature for the shipment as the cold chain only maintains the temperature of the produce. It’s also to consider the different types of temperatures the produce will experience during transportation and on arrival.

Modal Choice
Consider the different factors for moving the shipment:
·         Distance between origin and the end destination
·         Size and weight
·         Time restrictions

These factors need to be considered when deciding the form of transportation that will be best suited to the consignment.

Custom Procedures
The custom procedures must be taken into account when crossing boundaries. This is vital for time sensitive products such as pharmaceuticals.

The Last Mile
During the last stage of the transportation the timing and delivery method has to be considered. Tracks and vans are the most common form of transportation and they need to meet set specifications to be a part of the cold chain supply.

Integrity and Quality

When the shipment is delivered the temperature needs to be recorded. This is so the logistics process can remain accountable if there are anomalies; it also builds trust and ensures accountability.

Thursday, 13 February 2014

Why Cold Chain Logistics?

cold chain logistic
Image source: khunaspix, 
The use of cold chain logistics allows developing counties to target new markets around the globe. As a result the cold chain has three main impacts:
  • Global – Thanks to the functions of the cold chain agricultural industries are able to sell and ship their food produce to distant markets. It also can be used to ship vaccines and other medication from the pharmaceutical industry along with biological products from large facilities.
  • Regional – Supports the production of the area along with the economies in distribution. For example the cold storage facilities are able to service the regional grocery markets and labs needed to exchange components that are temperature sensitive.
  • Local – The local goods are shipped in a timely fashion to the final consumers.
The shipping of food perishables is not new; they have been refrigerated and frozen to be shopped since around the 1950's. The use of the cold chain for medical and pharmaceutical supplies is much more recent. Thanks to the use of the cold chain for urgent and vital materials and components it has grown in importance, assisting research, experimentation and development. The cold chain provides a way to ship products that could pose risks if the temperature wasn't controlled. 

Wednesday, 12 February 2014

What is Cold Chain?

cold chain
The world is a smaller place thanks to globalisation, but the actual distance between locations is still a reality that needs to be worked around. When goods are required to be sent over long distances they risk being damaged through the transport operations, especially perishable goods that need to be maintained at a suitable temperature. This is why pharmaceuticals, food and medical industries are turning to the cold chain, but what is it?

The cold chain is designed specifically for temperature sensitive products being sent via the supply chain. The cold chain uses thermal and refrigerated packing methods along with suitable logistics planning so the goods being shipped are protected.  It uses:
  • Science - so the chemical reactions and biological processes linked to perishable items are understood
  • Technology – maintaining suitable temperature conditions during the supply chain
  • Process – It is a logistical process that involves preparation, storage, transportation along with temperature monitoring
This scientific, technological process opens up global markets to current and developing countries who want to sell their perishable goods to the rest of the world in order to improve the economy.

Tuesday, 11 February 2014

BT Outward Bound Adventure 2014

Royale International will once again be entering a team into the Outward Bound Adventure race this year on March 9th. 

Following last year’s successful participation the same team of Phil Murton, John Fawcett, Dean Locke and Wayne Griffiths will be taking to the mountains of Sai Kung and the cold waters of Hebe Haven to run, climb, abseil, swim and kayak their way around the 20km course all in the name of charity. Money raised will be going to the Outward Bound Association of Hong Kong who provide outdoor education programs for underprivileged youths in HK.

Sponsorship is of course warmly welcomed and we will post some photos online after the event.

What European Online Consumers Want

If you’re targeting consumers in Europe it’s vital that you identify their wants and needs when it comes to retailers and online shopping. The main focus needs to be on omnichannel retailing, the combination of social media, the buying experience and both bricks and mortar stores and online stores. Here are some of the most important points to take away:

Social Media and Mobile Channels
Social media and the use of mobile devices are having a huge impact on shoppers in Europe. They are using mobile devices to buy online, the use retailer apps and are less likely to compare prices on the app compared with the retailer website. Consumers enjoy connecting with retailers on social media too in order to stay updated and to use their online customer services.

Consumers Want Choice and Convenience
Shoppers in the UK are looking for the total price and the cost of shipment very early on in the purchasing process. They want to have choice when it comes to the delivery date and are interested in click and collect services that are more convenient to them.

Easy Returns Systems
Returns are an area that can improve help to increase sales and have a huge impact on customer satisfaction. Many shoppers state the returns methods used by retailers require attention and many will not buy from a retailer until they have checked the returns policy to ensure its hassle free.
Therefore as a retailer it’s essential to work on combining a consumer experience both on and offline and embrace mobile and social media as part of your day to day marketing and customer services.

Monday, 10 February 2014

The Different Types of Courier Service Available

courier service
As businesses and individuals have different needs and expectations it’s necessary to provide a wide range of choice. Let’s take a look at the multiple types of courier services available in the market.

On-Board Courier
The use of an on-board courier is the most complex and expensive service available but it provides a service that is essential to many customers. Many industries uses this services but the most common use of this service is for medical cargo, vital parts or sensitive or legal information. 

Personal Courier Services
The use of this service is most commonly required to cover short distances in a hurry, it is ideal for the cities. The goods transported vary from documents or sensitive materials and the package arrives in a fast and timely manner.

Same Day Courier Services
A fast service available for when the package has to travel a reasonable distance from the sender’s address.

Overnight Courier Service
Overnight couriers are a common method of courier service often used by retailers to provide fast shipments to their customers. It’s cheaper than same day but more expensive than standard.

Standard Courier Services
Many customers will choose the standard courier service. The service is timely but not quite as fast as the other services listed above. It’s also cheaper and it’s possible to require a signature in order to have the parcel delivered.

Back and Part Loads Courier Services
Businesses can benefit from this type of service if they frequently use a courier.  It saves money as items can be delivered in groups based on the destination. Instead of being delivered on its own the courier will deliver the goods as they pass the area when delivering other packages. It’s still timely and if no other parcels are being sent to the area there is often a clause that will ensure the parcel is delivered anyway.

Saturday, 8 February 2014

The Different Types of Ecommerce Business Models

Business Models
Online Direct Marketing
Selling products or service online.  Sales may be from manufacturer to a customer or from retailers to consumer
Electronic tendering systems or “reverse auction.
Large organizational buyers, private or public usually make large volume or value purchases through a “reverse auction”. Tendering can be done online, saving time and money.
“Name your own price” or Demand collection model
This allows buyers to set the price they are willing to pay for a specific product or service.  The company then tries to match a customer’s request with a supplier willing to sell the product or service at that price.
Find the best price or search engine model
Customers specify a need and then a company matches the customer’s need against a database to locate the lowest price and then submits it to the customer. The potential buyer then has 30 to 60 minutes to accept or decline the offer.
Affiliate marketing
The marketing partner of a business, an organization or individual refers consumer to a selling company’s website through placing a banner ad or logo of the selling company on the affiliated company’s website. The affiliated partner then receives a commission whenever a customer referred by the selling company’s website makes a purchase.
Viral Marketing or web based word of mouth marketing
Increase brand awareness or sales generation is achieved through inducing people to send messages to other people or to recruit friends to join certain program.
Group purchasing or volume buying model
A third party find individual or SME and combine their small orders to attain a large quantity and then negotiate for the best deal.
Online auctions
Online shopper make consecutive bids for various goods and service, the highest bidders get the items auctioned.
Product and service customization
Product or service is created according the buyer’s specifications at cost not much higher than their non-customised counterparts.
Electronic marketplaces and exchanges
E-marketplace trading process for products such as stock and commodities exchange
Information brokers (informediaries)
These are information brokers that provide privacy, trust, matching, search, content and other services.
Companies use bartering to exchange surpluses they do not need.
Deep Discounting
Companies offer products and service at deep discount as much as 50 percent off the retail price
Only member get discount
Value-chain integrator
Offer services that aggregate information rich products into a more complete package for customers thus adding value.
Value chain service providers
Providers specialize in supply chain functions such as logistics or payments
Supply chain improvers
Creation of new models that change or improve supply chain management
Social Networks, communities and blogging
Companies are developing commercial benefits from social networks, communities and blogging
Direct sale by manufacturer
The manufacturer eliminate all intermediaries, selling directly to customer
Internet offers negotiation capabilities between individuals or between companies.