Amazon starts ringing the cost changes, eBay upsets users – eCommerce news of the week

We are 2 weeks away from Christmas day which will be the crescendo of all online shopping globally. Did planning in earlier quarters return value? How many satisfied customers did your business have? The point is the month of November and December is when business weaknesses or strength are shown to the world. Amazon has been making changes all over the place – I suspect their change in pricing for AmazonFresh users in Seattle is going to lead to a lot of new subscribers for Instacart. Also Amazon seems to be taking a lot more control this year with regards to shipping than previous years. I wonder how UPS feels about that change? Bezos is at the moment showing that the Kiva purchase is adding a lot of speed and optimisation to the sorting and shipping at various Amazon warehouses.  However Amazon has made some uncharacteristic errors with fulfillment in the UK and I have to wonder whether the robots have anything to do with that.

On the otherside of the equation in ecommerce is eBay. First rumors first broke by the WSJ on a move to cut 3000 (10%) of the marketplace workforce. It seems that John Donahoe current eBay CEO will be leaving the marketplace board and only joining PayPal’s board in 2015. I am not buying the fact that he wants to provide Devin Wenig the room to do what he seems fit. Would this be case if eBay’s marketplace business was in a strong / dominant position? I tend to doubt that.

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Sync Everything with Skubana

When I think of e-commerce, there are essentially two parts to it. The first is the lovely and beautiful UX of product pages and shopping carts that buyers use to purchase items from online retailers. The second is the tremendous amount of systems behind this UX that ensure the buyers actually receive the products they order.

And it is this backend infrastructure that is the major pain point for e-commerce sellers today. Just think of all that sellers can (and usually must) do to fulfill orders and run their business.

  1. Channel Integration – most e-commerce retailers sell on multiple sales channels (Amazon, eBay, Magento, Shopify, etc.), which means they need tools to communicate with those channels.
  2. Order Processing – whether shipping orders from their own warehouse, outsourcing fulfillment to a 3PL center, or drop shipping products directly from their vendors, sellers must rely on a myriad of software platforms to deliver their products to customers.
  3. Inventory Management – as orders come in, products leave the warehouse, and the challenge of synchronizing inventory across all channels becomes a huge headache because none of the channels communicate with each other.
  4. Purchasing – as soon as sellers start running low on inventory, they rely on purchase orders to their vendors to replenish stock.
  5. Accounting and Analytics – e-commerce is a tremendously competitive space, and unless a seller can keep track of their expenses and analyze sales data, they will likely get outperformed by the competition.

If the list above sounds complicated, it’s because it is. There are 5 million (and growing) small and medium e-commerce sellers in the U.S. alone that currently struggle to process their orders and manage inventory because they have to piece together a hodgepodge of software solutions to run their business. These are serious pain points that cause sellers to lose thousands of dollars each year due to overselling and being under-stocked.

One of those sellers is Chad Rubin, a very successful owner of the e-commerce company CrucialVacuum. While I was in the U.S. in October I caught up with Chad, and to my surprise found out that he might have the answer to the woes that plague e-commerce sellers today. The name is Skubana, and it is Chad’s latest and without a doubt greatest endeavor: the world’s first and only all-in-one cloud e-commerce backend platform.

To create such a revolutionary product, Chad knew he had to team up with the right technical resources.

Enter D.J. Kunovac, an enterprise architect and engineer who previously developed software for hospital networks while working for McKesson, the largest healthcare company in the world. The two have teamed up to create something no one has dared to try so far in the e-commerce world: an e-commerce unification platform.

And after seeing the platform in action, I believe that this is a potential game changer.

Skubana is based in New York and a stone’s throw away from where Quidsi was operating from. Currently Skubana is only focused on the U.S. market and is at the moment doing a private beta with select merchants.

You can sign up here: http://www.skubana.com/signup

Skubana has, in my opinion, the ability to democratize a part of the commerce industry that is not big enough for enterprise software, but is too complex for out-of-the-box solutions. They launch in the Spring of 2015, and the world of e-commerce may never be the same again. Stay tuned.

Disclosure: I received no payment for this post nor have any business interest in Skubana. Chad is someone whom I respect and his business is a part of ecommerce that no platform is looking at. This post is my opinion about a platform that I think can change a lot of things for business owners.

The tale of 3 commerce IPO’s – ecommerce news of the week

The past week contained events that might not be seen again soon. Three companies (Rocket Internet, Zalando and Wayfair) that have a connection to ecommerce that has gone public. Rocket Internet and Zalando went public in Europe and across the Atlantic, Wayfair went public as well. The public companies will experience very different environments and one needs to keep in mind that they are all 3 businesses that went public after Alibaba; which in my opinion did take some interest away from these businesses.

In Europe Zalando and Rocket Internet went public and had a tough few days on the markets. Both companies lost value due to market feedback. I am planning to write a blogpost soon about my own thoughts on Rocket Internet and to a lesser degree Zalando IPO’s. I will concede that it is a massive moment for European startups as in a space of a week 2 companies that have their headquarters in Germany suddenly are valued in Billions of Euros. Can Rocket and Zalando grow at 40% top line year on year?

In Boston, Wayfair became a public company raised $320 million from investors as part of their IPO. Wayfair for me is quite different than the German companies. One – they have been around for longer, have made a considerable amount of revenue but I have to question if the growth is sustainable? How much money will be have to be spent to build the Wayfair brand? Greg Betinelli had an in-depth look at their S1 and provides some great insights into the Boston company.

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Wayfair and Rocket Internet to IPO the coming week – eCommerce news of the week

We are a few days away from the beginning of October, which is the start of the festive season for ecommerce businesses. All the planning should have been done as systems will be tested as customers make their early festive purchases. The coming week also contains the annual Shop.org conference which will be in Seattle in which global ecommerce executives come together to learn about new trends etc.

We are also most probably going to see potential rivals in home goods going public this week. Wayfair, the Boston based powerhouse will be going public. Greg Bettinelli whom did a great job looking at the Zulily IPO documents had some interesting insights this past weekend:

Across the Atlantic, Rocket Internet will also most probably be going public this week. The company has claimed that it will be taking a more hands-on approach with the various businesses it has in its portfolio. I tend to believe that Kinnevik the major funder behind Rocket Internet will be happy that institutional investors and other investors takes some risk in the platform venture based company. However not everyone is seeing the upside of the Rocket Internet IPO:

 

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Alibaba goes public – eCommerce news of the week

The long awaited Alibaba IPO has come and gone. The Chinese behemoth went public amid a huge amount of PR and celebration. Needless to say – I believe that it is a line in the sand moment. We will most probably look back at the past week in years to come as a watershed moment for Chinese technology companies.

Alibaba – a Chinese company now has billions of opportunities to disrupt regions, single markets or competitors. The major story that broke on the day of the IPO was that Alibaba was supposedly looking into funding Snapdeal. If that is the case then Indian ecommerce is the first market in which all of the heavy weights are seen competing. Alibaba will be looking at going into India, the Middle East and Latin America as currently they have little or no presence there. I cant help but feel that a lot of the investment into Alibaba is more an investment into China than in the company itself..

In the next 6 months we will get an idea on how profitable Alibaba really is. I believe strongly that in the last 12 months they did a lot of promotional events to ensure that their IPO prospectus have a lot of amazing numbers.

Secondly – I also think that a fair comparison to Amazon is still in order – are they really that profitable? I understand that they don’t have logistics and last mile delivery like Amazon does, but with the exclusion of the massive Chinese scale – this business does seem to be to good to be true.

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