Last week, I visited a customer of mine, Midwest Photo Exchange. In addition to selling on its own ecommerce site, Midwest Photo Exchange also sells its cameras and related equipment in the eBay and Amazon marketplaces.
The owner of Midwest Photo Exchange took me back to meet the staff member who processes marketplace orders. She had two large monitors in front of her, and was literally copying data from inbound Amazon orders on one screen and pasting them into their POS system on the other. Later she would repeat that process in the reverse direction to enter shipping information.
The process costs so much in human resources and errors that it is eating into their earnings. Needless to say, we are now in the process of automating that data flow in the same way we do with their web store. Unfortunately, though, this scenario isn’t rare. In fact, it’s quite common – but it doesn’t have to be.
In order to take full advantage of the opportunities eBay and Amazon offer, you must prepare your back-end systems and processes to handle the additional volume and complexities that come from selling through these online sales channels. Below are a couple of steps that will help you keep the revenue you earn from online marketplace sales instead of squandering it on inefficient processes.
Prepare your item data
Before you even list an item on eBay or Amazon, you must prepare your item data to meet each marketplace’s specific requirements. The best way to manage items is to develop a master item list. For manufacturers and wholesalers, this could be done in your ERP or accounting system. For retailers who operate physical stores, your POS system may be a better choice. The item master will serve as the core list of your items that can then be disseminated to each of your sales channels.
Next, turn your attention to the items themselves. Assign a unique identifier, such as a stock-keeping unit (SKU) for each of your items. This will help you track the item throughout the order-to-cash cycle and track sales.
Finally, in addition to the standard item details that you probably already have stored in your back-end systems, you will also need to generate or collect supplemental information required by these marketplaces.
Categories: Both Amazon and eBay utilize a category structure to organize items and make it easier for buyers to find what they are looking for. You will need to map each of your items to these categories in order to list them.
UPC Code: For Amazon, you will be required to have a Universal Product Code (UPC) or other unique identifier such as a European Article Number (EAN) or International Standard Book Number (ISDN). Sellers use this number to match their item to one that already exists in Amazon’s catalog or to create a new item.
Title: eBay allots 80 characters to the title field and it’s recommended that you use as much of that space as possible. Use specific keywords such as brand, style, color, size, etc. to help buyers with their searches. For Amazon, the title may already be pre-determined.
Description: Both marketplaces offer space for you to write your own description. Your description should be precise and simple to read, yet include all of the available information about the item. Informed buyers are more likely to buy.
Images: Include high-quality, well-lit, close-up images of your items with plain, uncluttered backgrounds so buyers can see exactly what they are buying. Pay attention to specific requirements for these images (i.e. Amazon requires that the product must take up 85% of the image and it must be on a white background).
Price: You will need to determine a price for your item. You may want to see what price points other sellers are offering in order to remain competitive. For eBay, you must also decide how you want to sell your item, either auction-style or as a fixed-price listing.
Shipping: Choose a shipping method and fee. Remember that free shipping is a big selling feature on marketplaces or any online sales channel.
Although much of this item information can be found in your business systems, the fields are not always organized in a way that map cleanly to eBay or Amazon. Other fields – such as the title, description and images – may not be available at all. Therefore you will need to either manually enter those fields or use a third party application that can store that data for you and push it to the appropriate sales channel when needed.
Create an integrated infrastructure
The other area to consider before listing products on eBay or Amazon is your back-end infrastructure. Will you integrate the various systems involved in the selling process or will you rely on manual entry to move data? While manual entry may seem like the quickest, easiest and cheapest solution for moving data from one system to another, this strategy often backfires in the long run due to the labor requirements, errors and lack of real-time processing. Integration, on the other hand, eliminates those issues. Let’s look at the processes that will need to be managed.
Item management: As mentioned above, preparing your item data is a must. The next step is uploading it to Amazon and eBay. Both when you publish the items for the first time and when you make changes, you will need to pull your item data out of the business application that stores your master item list and push it to eBay and Amazon. Depending on the number of items you have and the frequency in which you make changes, this can be a very big undertaking if managed manually.
Inventory management: Mismanaging inventory is a common mistake for online retailers. As you fulfill orders and deplete inventory, you need a system that can provide real-time updates to ensure products listed are, in fact, available. In today’s highly competitive retail environment, stock-outs are sure to anger buyers and drive them to other sellers, so utilize alerts when stock runs low to ensure you never encounter a stock-out situation.
Sales transactions: With any luck, orders will be flowing in from eBay and Amazon. With integration you can automate sales transactions to/from your business systems through process workflows that manage the entire order-to-cash cycle. By choosing integration over manual entry for this process you can maintain near real-time processing and manage by exception, keeping your labor costs to a minimum.
Marketplaces represent a great revenue opportunity. But as Midwest Photo Exchange learned, the devil is in the details. The more time you spend preparing your items and integrating your infrastructure, the better you can control your costs and the more you can add to your bottom line.