19.10.21

What to do with the growing costs of working with merchants

Business scaling opens up new prospects for the marketplace's development but leads to some problems as well. They are primarily related to partnership management. The more merchants the marketplace attracts, the more difficult it is to organize their work and optimize the budget.

It sets a lot of tasks for the platform's owner: before entering into a deal, it's essential to check each supplier for good faith and reliability, connect them to the trading platform, provide instructions for work, and establish control over all processes and goods. And do not forget about document management and mutual settlements.

It is not easy to complete all operational tasks manually and quite unprofitable to involve more moderators to control new merchants. However, we have a solution to the problem, and not one, but 5! In this article, we will discuss 5 effective tools to reduce the time, effort, and money spent on supplier management.
Merchant Management Tools
1. Automatic Onboarding
Good supplier relationships are the backbone of marketplace business. And the first step to building a fruitful collaboration is onboarding. In fact, it is the path that a supplier takes on a new platform: from familiarizing and registering to confirming a request to participate in the marketplace's activities.

For an e-commerce business, everything looks not so simple: with new participants, transaction costs increase. Receiving hundreds of messages with questions forces the marketplace to hire officers to work with merchants. Considering that several departments are involved in the merchant's registration, high costs may arise, and they do not always pay off. You can simplify your work by implementing an onboarding automation solution (MAS).
The features of the Merchant Administration System:
invitation of the supplier to register on the platform;
registration of a personal account according to the established algorithm;
formation of a unified database of registered merchants;
storing data and history of interactions with suppliers;
providing access to the account, PIM, OMS, and bills;
regularly sending notifications about the status of your account.
For example, the introduction of MAS helps to attract new suppliers to the marketplace and retain them, providing the best experience of familiarization and adaptation. The platform owner can automate 90% of the routine tasks associated with registering merchants, tracking their data, and meeting regulatory requirements.
2. Service Level Agreement
A business dealing with different suppliers depends on the quality of their work. If marketplace members provide poor customer service, it is dangerous for reputation. Modern consumers have a lot to choose from: faced with poor service on one site, they quickly switch to others and write negative reviews before leaving. It significantly reduces the competitiveness of the marketplace and its chances of success in sales.

It is quite easy to avoid the problems associated with the dishonesty of partners. To do this, record the main aspects of relationships with merchants in a documentary form: in Sales Level Agreement, or SLA. It contains the most significant indicators and criteria by which you can assess the quality of service providers. And, importantly, the document clearly describes the actions of the marketplace in cases where suppliers still violate the established rules.

When drafting an SLA, you should avoid ambiguity of interpretation. Therefore, it is necessary to use only measurable and understandable metrics. Define a cutoff for each dimension, for example, no more than 40% bounces and 35% abandoned carts. The same is for the speed of response to a client's request during a working day (up to 30 minutes if the number of calls per hour is less than 20). Each merchant should familiarize themselves with the SLA terms because the success of the cooperation depends on it.
3. Automating the distribution of orders
Order processing is one of the routine processes that take a lot of time and effort when executed manually. In addition, when the supplier base expands, it becomes unprofitable for both parties: the marketplace employees cannot control all orders, which inevitably affects the quality of customer service by merchants. Especially when it comes to distributing orders between hundreds of performers. Here you need automation as well.

The OMS (Order Management System) manages order management procedures, from the moment a request is received from a customer and ending with tracking the status of readiness. The system accepts orders from various sales channels, including social networks, instant messengers, and an online consultant on the website. But its main feature is automatically transferring the order to the merchant who owns the product.

Automation tools relieve managers of responsibility for the distribution of orders and, accordingly, minimize the risk of errors associated with the human factor. It is helpful not only for large e-commerce sites that partner with hundreds of suppliers but for small online stores planning to scale up or switch to a dropshipping (direct delivery) model.
4. Access to the product catalog for merchants
Work with content in the marketplace is complicated due to a large number of suppliers. Various goods appear on the showcase every day, containing photos, videos, descriptions, characteristics, and reviews. This content must be properly managed: added, edited, and updated. Sooner or later, you will need to expand the content management department, which will significantly increase the costs of the marketplace.

There is another, more profitable way to solve the problem. And it is possible if the marketplace uses PIM, a product information management system. By providing each merchant with access to PIM, you can avoid the cost of content management: you don't have to hire new specialists because the merchants become responsible for managing the catalog.

Suppliers can independently upload their products to the catalog and fill the cards with the necessary text and multimedia content. Products will be automatically displayed on the showcase. Marketplace employees (a system administrator or content managers) only need to moderate the goods and check the content for compliance with the rules of the trading platform.
5. Marketplace Coordination
Despite the unique features of automated systems, even the best software cannot completely replace manual labor. The system can be entrusted with the execution of routine tasks, where it is important to exclude the risk of errors due to the human factor. It is necessary to automate daily tasks that are problematic to perform manually. For example, sending invitations to merchants for cooperation or distributing orders among performers are more profitable to be automated.

Product catalog management and customer service quality assurance are not so simple. These are the areas that require human involvement. The system plays the role of an assistant here: it exchanges product information with the warehouse and the showcase, notifies the manager about the loading of new products, and timely updates the order readiness status. But people are still responsible for the control of work processes.
Who coordinates the work of merchants:
Category manager responsible for assortment management within particular product categories.
A personal manager assigned to the merchant and acting as a "guide" to work on the marketplace.
A moderator who checks uploaded products and leaves notes and comments for merchants in the system.
The involvement of a manager and/or moderator in managing merchants is also necessary to set up automation tools and use them intelligently. Manual and automated labor complement each other harmoniously: with the help of software, one employee can control the quality of work performed by dozens of merchants at the same time. Of course, if the specialist is well-familiar with the functionality of the software and has experience in this area.

So, the use of automated tools reduces the costs of performing the most important e-commerce processes: attracting and adapting suppliers, managing the life cycle of an order, updating the product catalog... This can also include generating analytical reports: systems automatically generate data on service quality indicators.

However, automation is pointless without human control, and therefore the marketplace has to make sure that all its employees effectively use the tools available to them.
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