How to Select the Right Online Retail Vendors

Deciding Which Vendors To Work With
for Online Retailing
• Before selecting
vendors know your
internal context!

things you •Include context and
industry specific criteria

need to iin RFP’
RFP’s
•Introduce Performance
know… as a selection criteria
wherever possible
h ibl
•Travel light!
•Evaluate the Fuzzies!
•An insiders view..
Questions?
dxignite@optus.ap.blackberry.net

Choosing the right online retail suppliers isn't
just about the prospective partner
companies……..

Questions?

Agreement
Signed

Questions?

Questions?

Before you go looking for vendors ,
know your context first. This
y
includes ;

- your customers
t
- - your company stakeholders
a d project goa s
and p oject goals
- your agreed definition of
success in whatever online retail
activity your pursuing!
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1 Know your customer

Standard sources include;
- Focus Groups / Research,
- Customer touch points
- Online Surveys
Often overlooked -> Mine any and all existing
online data exhaustively

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1Know your company

Understand stakeholder concerns and
requirements across multiple business functions.
Don’t forget Legal, HR
g g ,
Be aware of precedent for distinct types of
vendor relationships – ad agencies, recruitment,
property – ie Full outsource hybrid vs in house
ie. outsource, in-house
bias - as these can drive expectations in online.
Understand organisational strengths and
weaknesses – what skill sets are your t
k h t kill t teams
light on and conversely strong in.
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1 Know your future

What is the expected rate and scale of growth,
Is there implicit direction to g
p grow towards a
certain model of business (away from
outsourcing)
What other related but incremental goals are on
the company roadmap that involve online.

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Include your internal criteria
along with industry/market
specific requirements in
RFP s
RFP’s to a cross section of
prospective suppliers

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2 An RFP (Request For Proposal)
RFPs can be extremely valuable in optimising the
chances that suppliers deliver the solutions that
you need, & encourage the following:
Internal agreement: allow you to discuss and
finalize your requirements with all of the internal
y q
(and agency) stakeholders before involving a
further supplier.
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2 An RFP (Request For Proposal) :

Accurate proposals: allow suppliers t clearly understand
A t l ll li to l l d t d
your needs so they can provide you with the most
accurate estimates of their best solution.

Comparable solutions: ensure that each supplier
receives the same set of requirements and therefore
replies with a similar and comparable set of proposed
solutions.

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2
RFP’s for Ecommerce platforms and Site builds- Key
- Define scope ,
p ,overall design, functional components and
g , p
objectives of your e-commerce project

- Decide whether you have any applications that perform
similar functions within your business that you wish to
retain, and, whether there are any key dependencies
between existing applications and the new applications
you require.
i

- Each of these will need to be identified and the integration
g
requirements included in your business requirements.
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2
RFP’s for Ecommerce platforms and Site builds

- Scope should include End-user functionality, Back-office
functionality Technical requirements, Integration
requirements, Reporting requirements, Future
q p g q
requirements

- Further deta o t e bus ess bac g ou d, eco
u t e detail on their business background, ecomm
solution, and support style

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2
RFP’s for Email Service Providers

Decide on service provider vs tech platform.
based on your resource strengths & weaknesses
- Chemistry is vital in this high traffic supplier
- Everyday staffing quality is key
- Scope your needs and match capabilities – don’t over
don t
scope as you’ll pay unnecessarily now for the advanced
feature set that won’t be used for another few years

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2
RFP’s for SEM / SEO – Some suggested focuses
Seek a transparent approach to search engine marketing
Look for a structured approach to keyword analysis
Uses industry best practice
Will openly describe the strategies and techniques they will
use for SEO
Has a performance-based approach to SEO
performance based
Viable as a long term strategic partner

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Introduce Performance as a
selection criteria & / or
l ti it i
contractual element
wherever possible
h ibl

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3 Where possible consider;
- Arrangements that reward vendors on
performance – either solely or as a
component.
component
- Try before you buy performance trials
- Set a benchmark
- Be flexible on price………….

See Ben Kirshner, CEO, Coffee for less.com
Questions? on Marketing Sherpa

3 - Try before you buy performance trials
- Set a benchmark
- Be flexible on price
- Get a full trial
- Negotiate better exit terms

See Ben Kirshner, CEO, Coffee for less.com
Questions? on Marketing Sherpa

Travel li ht and b sure t
T l light d be to
evaluate the trade-off's in
a‘‘one stop shop’
t h ’

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4 Travel Light
When planning online projects ,
developments, and functionality –
especially f launches or relaunches – err
for
on keeping your scope lean.

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4 Consider
specialisation
of functionality
before paying
for a ‘1 stop
shop’

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Go (far) beyond an RFP and
make sure you evaluate th
k l t the
‘fuzzy’s

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5 Beyond the RFP - Supplier Evaluation
Does the supplier / vendor challenge your
brief or objectives?
Do they ‘want’ your business?
C ea
Creativity vs ROI - Do they ‘get’ e
y s O o ey ge e-
commerce?
Cultural fit – esp issue response
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5 Beyond the RFP - Supplier Evaluation
Do you like them?
Make sure you talk to enough potential
suppliers t b i with
li to begin ith
Whats the online community like for their
technology?
Do they have value to add across key
y y
elements of the end-to-end e-commerce
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process

An insider’s view :

‘straight to the point’

selection criteria
l i i i
to help you narrow things down..

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6 Ask for a list of the suppliers top ten clients by
revenue, in no particular order.
, p
Then ask the supplier how long they’ve been
working with each of these top ten.
Choose partners th t h
Ch t that have d
demonstrable
t bl
experience in organisations with both retail and
etail arms;
Don’t bother meeting with the business
development manager!

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6 Ask the agency to teach you how they go about
conducting SEO or SEM
Ask them to propose an informal, preliminary set
of clear KPIs.
Ask for an early termination clause in case of
underperformance relative to KPIs;
Ask them to send you an anonymised sample of
their monthly reporting templates.

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6 Conduct research on the agency through
Google.
Ask to visit the agency’s office, and meet the
consulting team in person. Visiting their
environment and shaking their staff’s hands will
g
give you a good gut feeling about the agency;
Insist on receiving, and actually call, 3 referees.
Once you get on the phone with the referees
referees,
ask them about what they feel are consistently
the weakest features of the agency.
THAT’S IT
Questions?

Questions?
Q ti ?
I’m always interested to discuss any questions you have
on this presentation or other online challenges.

If I can’t help you I can refer you to another etailer that
can.

Email me : dxignite@optus.ap.blackberry.net

Network with me @
http://www.linkedin.com/in/danferguson1

Questions?

Additional & useful references
Additi l f l f
Emarketer.com & search under
MarketingSherpa.com vendor selection
E-consultancy & their ‘supplier selection templates’
y pp p
http://theoatmeal.com/comics/design_hell for the
opening example
http://www.marketingsherpa.com/article_print.html?id 31
http://www.marketingsherpa.com/article print.html?id=31
273 How to Negotiate Trials and Lower-rates with
Vendors: 5 Strategies

Thanks to Tom Skotidas & Mark Baartse from First Rate & some of the star
suppliers I’ve worked with including ; SOM / DT Melbourne, Carl, Kellie &
Ben @ Reactive, EuroRSCG, Javelin Group

Questions?

How to Select the Right Online Retail Vendors

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