YOCABÈ PROFESSIONAL GUIDE

SELLING ON TOP ONLINE RETAILERS:3 PROVEN STRATEGIES

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Top online retailers are becoming more and more unmissable channels to

reach consumers worldwide. Over the next few years it is forecasted that

online sales will account for about 20% of sales for most brands and over

50% of these sales will happen on top retailers. In new markets such as

Asia and Middle East, the percentage of fashion sales on top online

retailers can reach even 50% of total sales for foreign brands. How to

address the growing segment of customers on these channels is a key

strategic question for most fashion Brands.

The introduction of the marketplace model together with the more

traditional supplier-retailer B2B model is offering to Brands new

opportunities to implement different strategies when it comes to

selling to the 500+ million loyal customers of the top online retailers

worldwide.

In this short article we identify the key dimensions to take into

account when defining a possible strategy and the impact different

choices can have on the key results we, and our partners, usually

measure. We will introduce these concepts by talking about three

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Over the next few years it is forecasted that online sales will account for about 20% of sales for most brands and over 50% of these sales will happen on top retailers.

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proven strategies we have implemented with our partners based on

their requirements, constraints and goals.

Key Strategic Dimensions There are several elements that can be considered in defining any

distribution strategy on top online retailers but these three are the

most important ones we have identified and that can shape materially

the results.

• Relationship with the retailer: following Amazon’s lead, most top

retailers in USA and Europe have created or are introducing a

marketplace in their platforms as a way for third party sellers to

reach their customers and for them to increase their offering. In

Asia and Middle East most of the online platform were already born

as pure marketplaces or mixed models. A key choice for Brands is

to choose between a traditional supplier-retailer relationship, i.e.,

Sell TO the Retailers (also Vendor in Amazon’s terms), or using the

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marketplace to Sell ON the Retailers (also Seller in Amazon’s

terms). Pros and cons of these two models are described in other

articles of ours.

• Product selection: most Brands tend to map their product tiers to

the various retailers. This is often due to strategic choices about

how and where to make some products available and often

because they want to be sure they can control the product prices.

• Product allotment and Logistics: the ability to sell on multiple

channels, including the marketplaces of top retailers, pose Brands

with the challenge of defining where to keep the products they want

to sell. When dealing with marketplaces, often the choice can be a

combination of keeping products in the Brand’s warehouse (when

possible), using a specialised B2C e-commerce logistics or using

the marketplace’s logistics solutions. This is made more

complicated by the constraints on shipping performance posed by

top retailers and by the high number of returns characterising

fashion e-commerce. This is materially amplified when it comes to

selling to international customers where the wrong approach to

logistics can make the whole business case fail.

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Key Goals of a Multi-Marketplace Global Strategy The introduction of marketplaces on top retailers opens to new

opportunities in defining the Brands’ strategy in dealing with these

more and more relevant sources of sales and visibility. In YOCABE we

have been focusing on selling fashion on top retailers’ marketplaces

since our inception so we have gathered experience and expertise

from several projects. Each one of our partner Brands has their own

requirements and peculiarities and we usually define with them a

custom setup. On the other hand, the key goals are often common.

• Sale volumes: selling more and increasing customers share in

some key segments is the inner goal of all business. Top online

retailers offer immense and often unmissable (think about China)

opportunities to increase sales and customers if properly

addressed.

• Margins: selling more is not enough for a business, margin control

and optimisation make business more solid and successful. When

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it comes to sell on these very competitive platforms taking

inventory risks and dealing with severe customer experience

requirements and high volumes of returns, margin optimisation is

crucial to succeed.

• Control: we know that a key dimension for fashion Brands is

control on the sale price, the product and brand presentation and

communication. One of the key issues Brands have regarding top

online retailers is the lack of control on pricing and descriptions on

these high visibility websites.

Three Proven Strategies Made Possible by Marketplaces Taking in mind these goals and the key dimensions, we here briefly

introduce three high level strategies that can be considered the

starting point of any custom strategy.

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EXPANSIVE

The Brand will both sell TO the retailer and sell ON the retailer most of

their inventory, both in season and previous season products. With

many brands where we have applied this approach we have doubled

volumes vs. selling only to the retailers. However, margins and control

suffer because the online retailer will tend to lower prices to win sales.

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SELECTIVE CONTROL

The Brand will sell a selection of products TO the retailer and choice a,

usually different, selection of products to sell ON the retailer. There are

several variations of this approach. A Brand may decide to sell their

top sellers themselves to preserve margins and control or, keep for

themselves special collections where control is key and sacrifice

volumes.

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FULL CONTROL

The Brand will not sell TO the retailer because they want to keep full

control and decide to sell all or a selection of their products ON the

retailer. This scenario is the one with more variations that can yield

different results. Here we assume that the goal of the brand is to

selectively choice retailers and products and align pricing to their

overall strategy

The allotment and logistics solutions are vertical dimensions to all

these strategies. To properly preserve margins when using the

retailer’s marketplaces it is key to use the right global logistics

infrastructure and intelligence in defining allotment between the

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Brand’s own warehouse, a global B2C specialised logistics and the

marketplace’s logistics.

Finally, these high level strategies should be intended as high level

variations of a strategy that usually is more articulated. A key

advantage in defining any strategy is to work with an expert who

knows very well the different platforms and can provide the right

logistics infrastructure and intelligence.

YOCABÈ is the smart platform to boost your online sales and connect with 300 million potential customers that regularly buy on top online retailers, such as Amazon, Zalando, Privalia, eBay, La Redoute.

How can we help you? Contact us for a free consultancy.

This document is the property of Yocabè srl. All rights reserved. No portion of this document may be reproduced in any form without permission from the Author.

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THE SMART SOLUTION TO SELL GLOBALLY ON TOP ONLINE RETAILERS