Connecting to online platforms such as bol.com, Amazon, Zalando or Thuisbezorgd seems very easy for many entrepreneurs and therefore very interesting. But what does this do to the competitive position of your organization? And what are other challenges you can face?
Threat or opportunity?
The large online platforms saw profits grow enormously due to the corona crisis. We also saw an increase in demand from our customers for links with such platforms. Many organizations will think “if you can’t beat them join them”. In many cases this is certainly the case. However, we also see various challenges when entering into such a collaboration.
This creates an unhealthy incentive if an operator of a platform is also a provider. The market master, who determines his own rules of the game, then also becomes a market trader on this same market. A platform can then better position its “own products” by placing them higher in search results. Because the administrator of the platform has all user data, he can see exactly which products sell best. Amazon is already making use of this by making ‘private label’ products cheaper and more visible.
Yet it can also pay off for organizations to join a platform. Especially bol.com or Zalando are interesting sales channels where you can reach a large audience relatively easily. A big advantage of bol.com over Amazon is that it does not yet offer private label products. At the same time, all these parties are partly shops – with their own stock and warehouse – and partly market places for other providers. Without clear rules, the incentive continues to exist to favor one’s own goods.
Do you have a unique product? Or if you have the exclusive right to sell, an online platform is quickly interesting. After all, it does not matter to customers who offers or supplies a (commodity) product. It is often the price which is the decisive factor.
Product and price determine your succes
It is important to ask yourself a few questions when considering joining a platform. Is my product unique? Can we distinguish ourselves on the platform or in customer experience (after sales)? How often does an average customer buy your product or service? Is it a one-off or repetitive sale? What do we outsource and what do we do ourselves? How do we bind the customer to us.
In addition, it is important to bear in mind that such a platform also raises certain expectations. This includes the terms of delivery, service, returns and complaints handling. When it turns out to be a success, this can also bring new challenges. Ultimately, it is up to the organization to weigh the costs of commission and – sometimes – distribution of a platform against the greater reach of potential customers. When an organization does not invest in its own distribution and marketing channels, the platform takes over this customer contact and your organization becomes enormously dependent.
Ultimately, it is very important that abuse of power and monopoly formation is actively combated. That platforms have a dominant position does not have to be a problem, as long as smaller companies have access to the online market and have a fair chance against the big (er) players. Supervision and new laws and regulations can also contribute to a healthier and more balanced online climate.
In the Netherlands and the countries around us, it goes without saying that you have one partner. Both business and private there is a huge taboo on having multiple partners at the same time. In this blog I explain the benefits you enjoy when you have 2 partners. On a business level, that is.
The implementation of a new ERP system is often quite a job. It is essential to select the right partner. A partner who is stable and reliable, both in planning and implementation and who has the right industry knowledge. Suppliers distinguish themselves by providing tailor-made solutions, specially developed for specific industries. Although organizations think they can benefit from this, in practice this often turns out to be different. It is precisely through the use of such customized solutions from partners that you are and remain dependent on this party. Both in the (further) development of the ERP system, as well as in support of the delivered solutions. This is not a healthy relationship, where you as a customer bear the most risks.
In an ERP implementation process it is therefore wise to do business directly with 2 parties, whereby the division of roles can be fulfilled according to your own wishes and taste. For example, you can choose to use this party as a second opinion and include it in all choices. You can also appoint a second party as project manager in order to gain and maintain control over the entire project. The benefit of such a collaboration translates into several ways. For example, the project (plan) will be assessed more critically and estimates will be better tested. Ultimately, this will translate into a better price and quality of the end product to be delivered.
After implementation, a new phase begins in which this same partner often continues to provide its services. Even after an implementation process it is wise to involve a second partner. This partner can assess whether what is currently running is functioning properly and give advice on this. A butcher who inspects his own meat is not likely to admit that it is not good. A second partner can always be honest about this because he has no other interest except yours!
Although organizations spend a lot of time selecting the right partner prior to ERP processes, this hardly ever happens until the next implementation or update. For years we have been the party that tells the real story without ministering to the mouth and invisible interests. We at Kaya are happy to be your second choice, your second opinion, your conscience, your rock in the surf. Because we believe in polygyny / polyandry for business relationships.