Used Food Service Equipment - Best & Worst Practices

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Online Marketplaces - Best & Worst Practices

Best practices for operating/running an online marketplace involved the deployment of an Inventory Management System with features such as dynamic repricer, inventory control and reordering capabilities, 24/7 customer service supported by a flexible data model that does not hamper the platform's workflow, and maintaining a strong presence on social media as a promotion platform.

Best practices

#1: Best practice relating to types of technology/software available to manage inventory across multiple marketplace

  • Managing inventory across multiple workplaces is cumbersome, as it involves multiple aspects to be handled such as updating inventory, handling dispatches, and so on.
  • It has been observed that for handling these aspects of managing order, inventory and returns requires specialized software rather than comparative simpler software such as MS Excel.
  • One of the best practices for operating/running an online multiple marketplace is multichannel inventory management. This system helps to sell effectively in each marketplace and comes with dynamic repricer, inventory control and reordering capabilities.
  • A report revealed that this inventory management software have other features such as warehouse management, order management, purchasing management, multichannel listing, reporting and so on.

#2 : Best Practice relating to Customer Relations

  • Examples of the best practices in online marketplace to improve customer relations include having a 24/7 customer service, an "easy-to-navigate" website, a mobile friendly user interface, accurate product descriptions, and having a well-covered FAQ for customers who prefer to help themselves.
  • The best practices also involve providing timely responses to customer inquiries, listening to customer feedback on social media and making the correspondence with the customers personalized (e.g. writing the customer’s name in every email correspondence).
  • Application of these various approaches require a support platform with a flexible data model that does not hamper the platform's workflow.

#3 : Best Practices relating to Promotion of products

  • One of the best practices for promoting products regarding online marketplace is products promotion on social media platforms such as Facebook. A report revealed that 52% of product sales can be attributed back to Facebook and 75% of a buyer’s touch points with a brand took place on social media.
  • According to Nuestar study, it was reported that Pinterest ads are 30% more effective than other display ads with sales in multiples of five, while delivering a 28:1 return on investment.
  • Also, Facebook was found to be effective in sales of products belonging to tech, retail, apparel, beauty, and fitness categories.


The Worst practices

#1: Worst practice relating to types of technology/software available to manage inventory across multiple marketplaces

  • Using a localized software that most employees are not trained to use was found to be a practice to be avoided, as this cause bottlenecks in inventory and order fulfillment due to the lack of proper training.
  • Other worst practices pertaining to the field of inventory management include different aspects such as overselling, over ordering, outdated pricing, infrequent inventory check, and so on.

#2 : Worst Practice relating to Customer Relations:

  • One of the worst practices pertaining to customer relations involved poor customers' engagement unless there is an emergency.
  • A report revealed that building a strong relationship with customers even when there is no emergency is a necessity. According to Zendesk report, 88% of customers reported that the company customer services influenced their buying decision.
  • Other worst or avoidable practices pertaining to customer relations are making false promises for short-term benefit and lack of transparency with the customers.

#3 : Worst Practice relating to promoting products

  • Seeing product-promotion not as a continuous endeavor was found to be one of the worst practices.
  • Also, closing a campaign then restarting it after a long period was found to be one of the worst practices in products promotion. A report revealed that advertisements of the company's product require a continuous process for guaranteed success and often required to run throughout the year.


Research Strategy

To address the research request, the research team searched through various media publications, industry reports, press releases, business publications, reputable consultancies databases, case study reports, research databases, and so on to identify the best and worst practices for operating an online marketplace and also in relation to the type of technologies/software available to manage inventory across multiple marketplaces, customer relations, products promotion, and so on. Our search was successful in identifying the required information. From various resources identified, we garnered different lists of best practices and worst practices for operating an online marketplace and inventory management, and selected the ones that are the most consistently mentioned in numerous listings.

Sources
Sources

Quotes
  • "Selling on a single marketplace? Two? Multiple? Selling on marketplaces can get tedious – updating inventory, handling dispatches, etc. on many marketplaces at the same time. A better option would be to go for software that manages all this for you – across all the marketplaces that you want to sell on."
Quotes
  • "In the long term, you cannot excel with excel! As a first initiative put in an order management software that manages your orders, inventory and returns seamlessly across your sales channels to facilitate the smooth shopping experience of your customers."
Quotes
  • "Without a centralized inventory management system, you risk having discrepancies across your channels. Overselling could happen very easily as you expand onto multiple marketplaces. You can’t afford having customers wait indefinitely until your products are back on stock. Similarly, you could lose out on sales if you understock because of poor inventory visibility. "
  • "Find a robust multichannel inventory management system with all the tools needed to sell effectively in each marketplace, such as a dynamic repricer, inventory control and reordering capabilities. Consider using an integrated partner to expand into a new marketplace, as this will simplify and expedite the process."
Quotes
  • "Successful Marketplaces know that a great Customer Experience isn’t just about delivering a product. Everything comes down to supply and demand. To really succeed, you need strong relationships with both buyers and sellers. The best Marketplaces elevate everyone’s experience. The necessity of managing so many relationships adds to the complexity of delivering great support in a Marketplace environment."
  • "Usually resolving an end customer concern means logging into several point solutions. Support team members will look up shipping numbers in one tab, confirm inventory in another, all while reading customer conversations in another help desk screen. Support teams are overloaded with transactional systems, instead of focused on relationships."
  • "Relationships are built on a shared history. Knowing the past experiences of buyers and sellers means that support teams can provide proactive, helpful advice. Getting this data into one place empowers support teams to build stronger relationships with both vendors and purchasers."
  • "Supporting customers in a Marketplace environment is a tough gig. But tools are improving to help support teams be more effective in building relationships. Using a support platform with a flexible data model means that your workflow (however complex) doesn’t need to compromise."
  • "If you’re working with multiple stakeholders, you need software that makes complicated relationships simple. "
  • "Being able to analyze customer trends and serve up insights for their business means building a stronger relationship. Your support platform shouldn’t just provide value to you—it should provide value for your partners too."
Quotes
  • "But the challenge appears when you try to promote products online. The competition is intense and often global. You have huge names like Amazon to contend with. As the competition heats up, ad costs rise. Finding the method that’s right for you and your business is the difference between paying unsustainable acquisition costs and making a profit in the ecomm marketplace. The more aligned your digital marketing methods are the better ROI you’ll achieve. That’s regardless of the competition."
  • "Social media advertising and ecommerce go hand in hand. 52% of product sales can be attributed back to Facebook. Around 75% of a buyer’s touch points with a brand they buy from take place on social media. A Nuestar case study showed that Pinterest ads are 30% more effective than other display ads with 5x the sales. It delivered a stunning 28:1 ROI."
  • "Facebook is really good for any kind of legal or uncontroversial product or service. Almost 1.5 billion people log in every day. Their interests and purchase behaviors are broad. Not surprisingly, tech, retail, apparel, beauty and fitness get the most clicks on Facebook."
Quotes
  • "Many companies also make the mistake of using a localized software that most employees are not trained in, which can create bottlenecks in inventory and order fulfillment. Lack of proper training can severely affect your ability to keep up with orders. Consider instituting a regularly scheduled training program, or making the switch to SAAS inventory solution."
Quotes
  • "Many marketplaces place the burden of customer service on the sellers. You often don’t get to engage with customers unless there is a problem. "
  • "Build a strong following with your customers off of the marketplaces. You can engage with them on social media, through email marketing, and your website. Many happy customers for get to leave reviews. Ask your customers to leave a review of your product. Include the link for them. When you make leaving a review as easy as possible, you're more likely to get one."
  • "Besides helping you connect with current customers, reviews influence potential customers. Around 88% of customers polled for a Zendesk report said that customer service reviews influenced their buying decision. So put some effort into getting those reviews. Most customers won't make a purchase without reading some."
Quotes
  • "Making false promises for short-term benefit would boomerang should something go wrong and will make you come across as the fraud. On the other hand, highlighting the potential risks involved would scare your customers away. It is your customer support’s responsibility to explain clearly and transparently how your business model works, how customers stand to gain in this model, what your safeguards are to avoid any trouble and what measures you take to make sure that the buyers are not stranded if something goes wrong."
  • " In most cases, your buyers may have made other related travel bookings hoping that yours will materialise. At this point, what is required of your customer support is to make sure that they deal with buyers with empathy and constantly keep them in a loop on what is happening. Allowing your customers to grope in the dark and speculate would only make your task more difficult and can possibly invite ignominy on social forums that will hurt your business."
Quotes
  • "Most online sellers do not realise this but, product advertisements should be a continuous process. Browntape tells us that one should not expect success on the first attempt. In fact, every attempt at advertising should be considered as a learning experience."
  • "Advertisements take time to build traction. Ending a campaign then restarting it after a long while will not help. These campaigns need to last throughout the year. Sellers must reinvest a portion of sales in promoting, just like they do in stock. This keeps the cycle going. According to the professionals at Browntape, about 5-10% of sales revenue should be dedicated towards advertising."