Doing the whole e-thing may work for a while, but it is far from being the proven pick&pack answer.
If the Kiplinger report holds water, some of the old guard will end up in new partnerships. There are probably more than several active e-com courtships in progress. However, it is still early in the game. Pulling off top level business coups is one thing. Bringing off new forms of operations integration requires more discipline and time. And that is what e-commerce in its complete form is all about.
A. Is there a ready market for independent pick&pack?
1. If there is anyone out there on the web with sales in their hands and no plan for fulfillment, they are keeping it a secret. When you explore the “merchant services” pages on Yahoo, Excite, iMall or any shopping portal (small or large), fulfillment is not being addressed or offered as a service. And this is appropriate because the complete e-com model is not yet out or even designed.
B. What the pick&pack opportunity is not!
1. Not The Same Old
If in providing fulfillment services, we did not need to be price competitive; and, if we were sure to get paid in advance or in a reasonable length of time regardless of the merchant’s circumstances, we would certainly have found commercial heaven that might be called a niche. There is nothing in e-commerce that looks heavenly. We will be seriously disappointed, if we are looking to just luck out and feed upon a spontaneous appearance of web blessed products in need of pick&pack.
We cannot think that writing some e-commerce software is the secret. Electronically plugging into e-commerce is a syllogism but not a simple one.
If we think independent e-com fulfillment services will operate in the same fashion as catalog pick&pack, we, again, will be disappointed.. The are many medium to large firms already dominating this area. Experience demonstrates that small business attempts at pick&pack remain small and struggling if they survive at all. TPG has experienced and, now, appropriately avoids trying to sell pick&pack services to the direct mail catalog business.
If we think there is anything about exploiting the web that is not being thought about by someone, somewhere, we are sure to be very disappointed. This is the most public commercial endeavor in history.
If we are looking to avoid the issues of changing who we are and how we operate and if we think that waiting for the big guys who have the money and resources to write the new e-tailing script and give us a part, we will be taking the hindmost.
If we think that our pick&pack service business can survive on its own, even if our client merchants fail or find only marginal success, we are wrong.
C. What are the answers we need?
1. What will e-commerce look like in 3 years?
2. What would be our e-com services profile?
3. What would our margins be?
4. How would we integrate with merchants and other 3rd parties?
5. What would be the ideal merchant profile?
6. What products could be best handled?
7. What would be our investment model?
8. How would our enterprise be marketed?
9. What would make for differentiation?
10. Who would be the competition?
11. How would we find our strategic partners?
12. What would be done with existing resources?
b. Direct Mail Marketing
c. Customer Service
d. Warehouse Space & Svcs.
13. How do we make transition from where we are now.?
II. Outlining An E-Commerce Model
A. Special Notes
Several things became very obvious in the course of researching this study. There is a lot of talk and speculation. There is a great deal of moving and shaking. The finer details of e-commerce have not been completely thought out. Many issues are still up in the air and terminology is not consistent.
For purposes of this paper, I have made the following distinctions:
1. E-commerce is used in a broad sense. E-commerce is a new system in which all parties are collaborators and have specific roles in getting the customers what they want. It refers to the larger process of buying, selling and managing the enterprise operations via the web. If we are looking for an e-com prototype, the stock exchanges are a good place to start. The exceptions to the stock exchange model arise upon introduction of the physical nature of e-com products There are 3 manifestations of e-commerce that require some recognition. They are:
a. E-commerce Seeking Definition (Now)
Whatever we see happening now including e-tailing..
b. Proprietary E-commerce
First attempts at owning the whole ball of wax.
c. The E-com System