To choose the right trading platform for cooperation, a checklist with essential topics may be useful. Of course, the primary focus should be to find a platform that has a user friendly interface, with a good customer service. These are two general criteria that should be taken into account. When offering your products however, also several commercial, marketing and operational considerations should be taken into account. These considerations can be found below per topic.
Selection criteria Marketing
- Does the platform suit your brand?
- For luxury brands it's important to verify whether you want to offer your products on all trade platforms, or only on upscale platforms. For non-luxury brands, the same is applicable, only the other way around.
- Does the platform reach the correct target audience? Figures!
- Is the platform visited by your target audience? You should prevent selling support hoses on Zalando, because you had the impression it was for all clothing. Therefore, make sure your target customer visits the platform, by looking at visitor data.
- Are the platforms' search and storage functions detailed enough for your assortment?
- If you're selling shoes, can you sort the shoe size? Can your jackets be hung on a clothing rack in the warehouse?
- Who determines the stock?
- Are you allowed to offer any product on the platform? Or does the platform decide which products you're allowed to sell?
- Who determines the way your product is presented?
- Is it allowed to deviate from the standard format that is used on the platform? Or are the rules for product presentation very tight?
- What is your position compared to your competitors?
- If the same products are offered on the trading platform by competitors, how are you planning to distinguish yourself from then? Purely price-wise, by offering extra service, unique accessories, or should you chose for skipping the platform altogether?
- Which marketing actions are performed together?
- Are your products marketed actively by the platform? Will you have to do this yourself, and is there room for this on the platform itself?
- Which information will you get back from the platform?
- Are you given insight into the buying history of your consumers? Will you get all consumer data? Is there a page with real-time statistics on the platform?
- In which countries does the platform operate?
- If international expansion is desirable, it doesn't hurt to check whether the platform also operates in other countries. This may simplify your international expansion significantly.
Selection criteria Commercial
- What is the cost / earn model? Leads of sales? Transparency?
- Is there a commission per sale, or per click? Is it clear how the costs are built up? How about the leads?
- What is the balance of power?
- Is the balance of power equal between you and the platform? Do you have any room for negotiations with the platform? If not, ensure that every single detail is put in the contract beforehand. This can protect you from unpleasant surprises later on, such as a sudden rise in commission.
- Does the platform sell their own products?
- What needs to be clear is that a situation in which you have to compete with the platforms' own products has to be avoided at all costs. In this case there can only be one winner.
- Who has the purchase agreement?
- You or the trade platform? Dependent topics are of course the responsibility of stock, service and warranty.
- Who becomes owner of the customer data
- If the trade platform becomes owner of the customer data, this means you will have no insights into who buys your products, where they live, how they find your products, and what the trends are. This can eventually lead to the scenario in which it's unclear which products should be developed, and how customers can be reached in the right way with mailings or offers.
- Who has the juridical responsibility (warranty, insurance, etc)?
- Is it clear who is responsible for what aspect? Will there be a contract discussing deviations from responsibilities? Make sure this topic is covered thoroughly!
- How about safety, privacy, disputes, etc?
- How will the trade platform store sensitive data, such as customer data and sales statistics? Are the safety functions and certificates of the platform in order? If the platforms' usernames and passwords are to leak, you customers will think twice before buying on this particular platform. This may hurt your brand as well.
Selection criteria Operations & IT
- Which stock model is used?
- Does the stock model used by the platform match yours? Who is responsible for the stock, and where is it stored? Does the platform allow for drop shipments? And what about return goods or left over stock?
- What are the delivery standards you will have to comply to?
- If the platform requires all its sellers to deliver within 24 hours, your company will have to comply to this. In case your stock is located in a different country, this may not be possible at all.
- What are the throughput times when offering a new product?
- How long will it take before the product is actually offered on the platform? Will it take long before product descriptions or photographs are approved?
- Who delivers the product data? Who owns it?
- Do you only supply products, or also the product descriptions, photographs, etcetera? And if the packaging is renewed, will you be reponsible for changing the metadata? Or will the platform change it?
- Which requirements are imposed as to the packaging?
- Is your current way of packaging good enough? And if certain matters have to be changed in order to sell on the platform, how much time and money will be put into this?