Chris Reddick and Ron Halversen talk about ERP systems and how they integrate with eCommerce platforms.

Part 2 of an 8-part series (Return to Part 1)

CHRIS: A lot of vendors and sellers will have this data incorporated into their ERP configuration systems or other product management systems, etc. And ultimately, we need to be able to offer them a way to seamlessly incorporate their information consistently, keep it up to date, and in relative real time as much as is reasonable. So what do you want to offer there and how are you going to provide that offer to your customers.  

Is it going to be something as simple as a bulk upload via a standard file format? Is it going to be API integrations? Will it be all of the above plus EDI and other forms of CXML, etc.? What process do you want as you continue to scale? And this should be an iterative thing. Going back to the acronym of constant and never-ending improvement. And it's really a fight for survival. Ultimately, you've got to prioritize properly so that you're not burning up capital on something that isn't going to be as high payoff as another key area.  

This, of course, includes looking at other aspects of motivating the sellers and making sure that things are run well. There's a lot of logistics that I think, ultimately, whenever you're scaling up, Ron—this can be a huge challenge for marketplace owners and operators—is making sure that the conditions are correct, making sure that the calculations for the taxes and the tax reporting are handled. Is the eCommerce marketplace going to handle that? And are they going to provide reporting on that? Or is that the responsibility of the seller?  

 

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CHRIS: Typically, a lot of the value from the marketplace eComemrce platform is going to be helping with and facilitating, or at least providing standard options, for providing calculation for taxes, possibly VAT, being able to deal with things like different types of sensitive products that may have shipping restrictions, being able to deal with the logistics in the shipping lead time estimates, these kind of things. 
 
Any thoughts that you want to share on that topic with regards to the number of vendors and sellers on a marketplace and some of the automation that we have to feather in, it doesn't make sense to do all of it all at once, because then you're going to burn through your capital too quickly, right? 
 
RON: The one feature that you mentioned that was really important—all of them were—the product upload, right? Because you don't want a vendor coming in, uploading a product to the eCommerce platform and going, "Oh, I think this is goes in electronics when it really goes in electrical." It's similar but different, because what happens is another feature that we haven't talked about is compare. When I go to Amazon and I do a search for a product, I'm trying to compare prices, but who am I comparing prices between? Well, and comparing prices between Prime—the one that I know that I can guarantee get it here in a day or two—versus all the other vendors that are selling that same product.  

So when I do a search or when I go look in a category, I expect to see multiple offers for that product across different vendors. But if we just allow the vendors to either willy-nilly select whatever they want and there's no—I don't remember, did you call it an approval process or an audit? When they bulk upload these products, do they go into an approval process? And as part of that process where they can only pick one category so they know they have to be real careful? Or do you have vendors and sellers that buck the system and assign their products to every category because they want their products to show up, even accidentally, on other searches?  

What's the option to contact a seller? Do you have the messaging subsystem in the marketplace platform where you can allow people to talk to each other and not poach outside the system because you're not giving away personal information...or are you allowing that? So somebody couldn't go send a note to a vendor and say, “Hey, I'll buy a hundred of these if you give them to me for 100 bucks less.” And they take the deal outside your multi-vendor marketplace platform. Yet you're protecting your business as well. The shipping, logistics, and splitting all that shipping and tracking.  

 

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RON: And then the last one probably is the governance—and we talked heavily about platform governance in the previous webinar—but governance on all these vendors and sellers, how we deal with that and how they handle disputes. And if a vendor kind of, like you said, you gave one example on if they're browsing a product, but they bounce rapidly, what do you do to help the vendor to improve? Or are they bucking the system? And it's like the old—you remember the old fishing thing a few years back where you get this email with a great subject and you go, “What is this?” And you click and it's like, Viagra, right? It was always that trip. It was the bait and switch, right? And then how do you address and fix that? 
 
So I think we've really covered vendors and sellers really well. But the key here is that you have to plan on any number, right? You have no idea. And I love your CANI, however you pronounce the acronym from Tony Robbins. My MBA professors all call it continuous innovation. We all talked about it where we said Blockbuster didn't do continuous innovation. They innovated the original thing and then somebody else came along—Redbox, Netflix—and invented the ability to get a DVD and send it to your house. 
 

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CHRIS: Blockbuster went bust. 
 
RON: They went bust. Yeah, I was going to say that exactly. It was too little too late. 
 
CHRIS: They didn't catch onto the streaming fast enough. 
 
RON: Exactly. Well, and the sad thing is that Netflix approached them on four or five different occasions and offered to let them buy them, and they said “no.” And so because of the lack of continuous innovation, they got out-innovated and became obsolete.  

Continue to Part 3 to find out more about product catalogs.