Intermediaries in any business model generally helps to manage complexity and connect parties through a seamless method. At least, that’s supposed to be the case. However in the ecommerce space, especially the ecommerce space where a lot of people today are entering into, in other-words novices, there are intermediaries that are capitalizing on the lack of knowledge. One of those intermediaries and the poster child for incompetence in the space is an ecommerce intermediary app called Spocket. There may be more but this is the one I’ve had experience with.
Now if you are venturing into ecommerce, you’ve probably heard of Oberlo, and Oberlo is clearly an intermediary for novices, and they have their own particular focus which is connecting novice Shopify merchants with fledgling suppliers in China. However in this case Oberlo clearly communicates that its suppliers are in China, so you know what you’re getting into. Where things become risky is when you don’t know how your ecommerce intermediary sources the products that you put on your store.
When an intermediary is unstable, faulty and weak then the whole business structure is balancing on a precipice. The platform will invariably fail as the merchants realize that operations are not sustainable, and this has been my experience with the Ecommerce intermediary Spocket.
The risk with trusting an ecommerce intermediaries
Running your business via an ecommerce intermediary not only increases risk but a lack of transparency as to the incentives of that intermediary can be detrimental to an ecommerce operation. Case in point when an intermediary advertises that their products are only sourced from US and EU suppliers, but actually a large majority of their products are sourced from China. The incentive is skewed in this scenario because the reason why the intermediary has chosen to source the vast majority of its products from China instead of the advertised locations of the EU and US is that they can appear to have a vast number of products. To the novice, who barely has time to research how to operate and successfully execute an ecommerce business, this is exactly the trap they fall into.
I was aghast when I heard that Spocket bought CJDropshipping and my question was why? CJ drop shipping is an ecommerce intermediary that primarily focuses on providing novice Shopify ecommerce merchants access to fledgling suppliers in China. This decision to buy CJDropshipping did not account for the numerous merchants using Spocket under the illusion that products they have on their store are being sourced from US and EU suppliers. Why would a merchant want to carry items sourced from the US or EU? Simply, these items will ship a lot faster and have less mistakes, the combination of which serves to benefit a merchant.
I am currently dealing with a still pending situation with an order concerning a shipment to a customer currently still in transit, 65 days and counting. Here are the problems this has generated, the customer filed a complaint with my payment processor, the customer experience is destroyed, and this customer will never do business with the my store brand again. In addition to all the other unforeseen consequences this might foster, this is but one of many endemic issues when an ecommerce intermediary is not transparent about their operations from the start.
Can intermediaries like Spocket help Merchant partners succeed?
Every decision made by an ecommerce intermediary should come from the vantage point of their partners. The question should be how can we help our partners succeed because when our partners succeed we succeed. Utilizing this framework makes any decision making more efficient. Furthermore putting the success of partners at the forefront of decision making ensures that the ecommerce intermediary is focusing its efforts on what creates value for its merchant partners. Absent this decision making framework, you have decisions like Spocket has made, which is to purchase a dropshipping operation that is focused on fledgling suppliers from China.
Another way that ecommerce intermediaries can help their merchant partners succeed, is simply to seek feedback from their merchant partners. It goes without saying that getting feedback from those you are designing a solution for can help in better optimizing the operation and function of the product. In fact there should be fluid lines of communication between the merchant partners and the platform design team as to what functions and features should be developed within an ecommerce intermediary platform.
Shopify does this very well in how they seek feedback, implement feedback and develop their ecommerce platform with their merchant partners in mind. This has led to their unimaginable success and it has turned the platform into a staple for any individual who wants to create products and sell it independently.