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Packaging in Ecommerce

Ordered a couple of items yesterday from 2 different sites: Myntra.com and Zovi.com.

Both companies took the exact same amount of time for delivery: a day and a half. Overall the experience with both of them was pretty good. Except that when I got the ordered items, I was a lot happier with the Myntra.com experience. Why? Mostly because their packaging was a lot better than Zovi.com’s.

This is what I got from Myntra.com. As a package it was colourful, and was promising of good quality items inside. It made you want to open it.

Zovi.com’s looked like they had sent me a bunch of documents. This is what it looked like. I’m not sure why, but I felt disappointed the minute I got this small brown paper packet which supposedly had my t-shirt inside.

 

So the point here is not to bicker about something that seems a relatively small issue. But its’ about the fact that a company cares enough that they want every aspect of the customer interaction to meet a particular quality, right down to the packaging.

And packaging is actually the first real interaction that the customer has with the product that they have just bought. It’ll be good for the Indian ecommerce companies to learn a lesson or two from the focus that world leading brands like Apple have put into this.

Yes, packaging costs are important to keep under control, but lets see some good innovation in this area. Looking forward for more exciting deliveries.:)

 

 

Murali Balan is the CEO of Tenovia Solutions, an Ecommerce product and services company. When he’s not discussing Ecommerce stuff with a retailer, he loves to go for long runs. 

Cloud Computing and Ecommerce in India

Its time that Indian Ecommerce companies started getting up and about on cloud computing. And when I say its time, I mean yes there are a few companies that dabble in it, but I’m talking about something like 25 – 40% of the Ecommerce companies in India using cloud computing in some capacity.

Who is it ideal for?

1. Smaller companies, hungry for growth.  And which is serious about spiking their traffic.

2. Large Ecommerce companies who have built up comprehensive platforms need to start pushing some of their applications on the cloud. Predominantly to get comfortable with it.

Why aren’t more people using it?

A couple of reasons mainly

1. Inexperience amongst the developer community with implementing cloud solutions. They’re still comfortable hosting applications on shared / dedicated servers and are afraid to experiment.

2. Online businesses are confused about the total cost of ownership of a complete cloud based solution. (CPU cycles / data download and upload pricing / pricing with and without CDNs, etc)

Way Forward

Okay, despite last week’s outage of services at Amazon’s Cloud, I believe that Cloud computing is where all of Ecommerce is headed. I believe that there is a huge Mobile commerce play that will consume the Indian market. And all those mobiles would need to interact with a lot of data sitting in servers. And that traffic’s unpredictability will be huge.

Cloud computing for Ecommerce makes too much sense and saves too much money to be ignored. And with Ecommerce at infliction point in India, its more important now than ever that our developer community / Online business heads wake up to this reality.

Ecommerce Logistics – The essentials

Picking a courier company / logistics partner is probably one of the most critical decisions for an Ecommerce company. They are the last mile of your interaction with the customer, and as a result you need to be really careful about that experience. So please consider the following points as you select one or more logistics partners for your ecommerce business.

1. Pin Codes covered - The more the merrier.  You would be surprised the remote corners your customers can come from.

2. Delivery times for Tier 1, Tier 2, Tier 3 and Tier 4 cities / regions - Most of your customers are going to be from Tier 1 and Tier 2 cities. So ensure that your logistics provider commits to delivering your products in these cities in super quick time. Ideally next day. Worst case within 48 hours.

3. Own Network vs 3rd Party Network - Ask your logistics provider about details of the network they cover. How much of the pincodes that they cover is by their own fleet, and how much is outsourced to a local 3rd party provider. The difference in quality would be stark between the two, as will be the accountability.

4. Dedicated Relationship Manager – Demand for one. You need someone senior to service your account. Depends on the size of your business, but still demand it and get it.

5. Rates - The all important one. Shop around and consider all the factors on this list, and not just this one. Yes it needs to make sense for your business. But you don’t want to pinch pennies here at the cost of your customer’s experience.

6. Technology support – Check out how much information they can provide you and your customers with their technologies. Courier tracking and on demand status are the minimal service they should provide. They should also provide your customer support team to find the status of a bunch of Airway Bill Numbers.

7. Reconcilliation – This one is crucial to your accountant. Make sure they offer you on-demand reports of how many packages were picked up, how many delivered, send you the proof of delivery receipts, as well as all cash collections for Cash-on-Delivery orders. Also settle with your logistics company once every fortnight. In my experience, the longer the period of settlements the more the number of issues that crop up.

8. Damage and Return policy - Read this part of any contract you sign very carefully. Who is liable in case of damages to the products? What is the maximum amount of liability taken by the logistics partner? What is the insurance coverage provided? Please factor in these points when you publish your return and refunds policy.

9. Weight vs Rate – When you are considering a logistic partner, please check how their rates goes up with respect to the weights of the shipment. Does the increase seem justified? Or do they plan to make a killing when the shipment weight goes up? When you formulate your own shipping policies please factor in these costs.

10. Cash on Delivery – Extremely important in India. COD is still the preferred method of payment for many online customers. So please pick a logistics partner that provides you this service. Also do the homework in checking out the reputation of your partner when it comes to settlement of the COD amounts. This is really crucial as they become your collection agents and any delays on the logistic partners’ part in settling payments would then impact your cash flows. But still this is extremely important. And cannot be ignored.

What to look for in a Payment Gateway provider

One of the first things most businesses do when they start an online business is to sign up with a payment gateway. Here are some of the key things you should look for in a Payment Gateway provider / partner.

1.  Commission and fees – The most important part of decision making. There is choice today. So shop around. All the payment gateways quote high percentages. Don’t give in easily to their demands. Remember, this decision has long ranging impact so negotiate hard.

2. List of participating banks – This is important, because this will open up the choice of paying through the bank of their choice. So ideally you want a PG that accepts all banks.

2.  Netbanking – Ensure that this is enabled for your account.

3. Integration – Ask details of time taken and complexity to integr ate your site with the Payment Gateway provider.

4.  Enrollment Process – How long does it take for the paperwork to come through. What documents do you need to submit?

5. Security Measures - Do you have to buy a SSL certificate? Most gateways would request you to buy one. If not, then how would you ensure the safety of your customers transactions and details.

6. Sandbox – What kind of a testing / stage environment does the Payment Gateway provider make available so that you can test out the entire system? Insist on a sandbox in which your developers can test the integration.

7.  Time to transfer the money to your account – Please get written commitments from the PG provider about this period. What documents, if any need to be provided to ensure the transfer of funds into your bank account.

8. Time to transfer the money to a customer in case of refunds – Please clarify this very clearly with the PG provider, as you would need to answer pointed questions from the customer in case of delays in refunding the money.

9.  Ease of reconciliation of accounts – How easy is it to reconcile accounts with the Payment Gateway transactions. Do they provide you easy access to download reports? This is important otherwise, as the transactions grow on your site, your accountant would find it difficult to tally things. What kind of online interface do they provide? Is it easy to look up transactions from previous months?

10.  Responsiveness towards Conflict Resolution – Every once in a while, a customer will argue that money has been debited from his account, despite your systems saying that the transaction was declined by the bank. In such cases, you need to be able to quickly check in your online panel. It is possible that the panel might back your data, but the customer could still be right. In which case you should be able to call a contact manager at the Payment Gateway provider and check with her / him about it.

11. Customer Service – Most importantly, you want a payment gateway provider that really provides excellent customer service, right from registration to integration to operational issues. Ideally, always ask and get to know a few people in the company well, so that you can reach them easily.

12. Backup – Sign up with more than one payment gateway. Highly recommended. Good to have backup of such an essential service.

13. Cash on Delivery / Cheque Payments - Lastly, and very importantly, Ecommerce still works very heavily on non-payment-gateway transactions in India. Ensure that your business has as many payment options that your customers can desire.

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