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    Wholesale businesses reaching out to the retail space should be seen as an aggressive; growth-oriented strategy. There are several positives that arise for a wholesale business when it ventures into the retail space and increases its foothold further down the supply chain reaching closer to the customers. With a presence in retail, wholesalers get access to better data to better understand customers’ needs and preferences. This information can be used for product development and improving customer services. With the removal of intermediaries, wholesalers get more control over the prices and margins. Last but not the least, by coming to the front stage retail, wholesale businesses can improve their overall branding.

    When a wholesale business ventures into retail, it faces a critical task of integrating its wholesale and retail operations. Several business processes involved in wholesale and retail operations will be interdependent for business decision-making and smooth flow of overall business operations. For example, merchandising is a retail process but is also connected to the inventory process which is common to both retail and wholesale for the fulfilment of supply requirements. Standard Operating Procedures (SOPs) can play the bridge through which these businesses can integrate their wholesale and retail operations. The transition from wholesale to retail is difficult but it can be made smooth by applying SOPs. In this article, we’ll try to highlight certain areas in which wholesale brands can benefit from SOPs when they make a foray into retail.

    Inventory Management

    For both wholesale and retail businesses, inventory management is a critical function. For wholesale businesses starting their own retail operations, it is understood that the supply requirements will be mostly fulfilled internally. The entire inventory process may have to be redesigned keeping in mind both the retail and wholesale functions. For example, while stock purchase may continue as a part of the wholesale business, the stock acquisition will emerge as a new operation for the retail business part. This also implies that a new operation (stock acquisition for retail) will be added to the inventory process of the overall business. Since it is very likely that the retail stock requirements will be fulfilled internally and this is not possible without human intervention, employees in charge of the inventory or store need to be provided with the guidelines on the what, when whom and where of retail procurement. This procedural roadmap can be made possible by developing standard operating procedures with the help of which employees can execute their routine duties in the inventory process covering both wholesale and retail operations.

    This procedural roadmap can be made possible by developing standard operating procedures with the help of which employees can execute their routine duties in the inventory process covering both wholesale and retail operations

    Staff Management

    If a wholesale business is expanding to retail operations under an organic COCO model, it will not only increase the strength of its workforce but will also introduce a completely new set of jobs in the organization. These new jobs and positions in retail will have to be filled with people whose skills, knowledge and competencies are likely to be different from those engaged in the wholesale operations. This will affect the recruitment process which now has to be guided according to the specific manpower requirements of wholesale and retail operations. For example, if a wholesale company was earlier hiring employees with a background in logistics, now the same company will have to look for employees with the retail-specific background like merchandising, store management, POS and cash handling, retail sales etc to fill up its retail positions. This necessary change in the recruitment strategy will have a direct bearing on the recruitment activities of the company. At the executive level, HR employees will need to know whether the requirement is for wholesale or retail, whether they have the job analysis report for the vacant position(s), where should they look out for the potential candidates, which platform should they use to advertise the vacancies, what criteria should they use to screen the incoming job applications etc. The answer to streamlining these operational activities lies in SOP development with which HR/Recruitment staff can be provided with a procedural roadmap to carry out these activities in a step-by-step and systematic manner to ensure that the right candidates apply for the vacant jobs and are screened and lined up for the selection process.

    These new jobs and positions in retail will have to be filled with people whose skills, knowledge and competencies are likely to be different from those engaged in the wholesale operations

    Similarly, many other HR processes (like performance management, training and development etc) will be affected by these kinds of business expansions and the necessary changes can be infused into these processes through SOPs.

    Customer Relationship Management (CRM)

    Whether wholesale or retail, any professionally managed company will try to maintain a strong CRM foundation with their clients and customers. However, retailer clients are different from retail customers as their priorities are different. While retailer clients may focus more on the physical elements like timely delivery of their bulk orders, safe transportation, proper packaging etc, modern day retail customers, along with the physical elements of retail merchandise, will also seek for a delightful and convenient shopping experience at the retail store or with the e-commerce channel provided by the retailer. In many ways, customers’ experience is the product in the retail space which is why CRM strategies and operations assume greater significance here. After extending its operations to retail, it becomes important for a wholesale brand to revisit its CRM strategies and introduce the necessary changes in the operations of its CRM process to suit the requirements of the retail environment. For example, grievance redressal for retailer clients may not be one of the topmost priorities for a wholesale business. But after venturing into retail, this has to change and customer grievance redressal has to be treated as a priority operation of the CRM process as it has a direct bearing on the experience of the customers. With the help of SOP procedures, employees can follow the standard protocols and procedures in the grievance redressal cases. For example, employees may first have to verify the purchase, ascertain if the store policies support the complaint/grievance, send the product for inspection, issue necessary invoices to the customer, ensure adherence to service deadlines etc.

    After extending its operations to retail, it becomes important for a wholesale brand to revisit its CRM strategies and introduce the necessary changes in the operations of its CRM process to suit the requirements of the retail environment

    For a wholesale brand venturing into retail signifies a business expansion of big leaps. Now it can ‘Buy Wholesale Sell Retail’ and improve their margins exponentially. And this business expansion can be smoothly carried out only when the necessary business processes are introduced and integrated with the existing ones. Operational activities are the building blocks of these business processes. With SOPs, these operational activities can be realigned and mapped in an objective, step-by-step and systematic manner which can immensely help the employees embrace a transitional phase.

    Benefits of Standard Operating Procedures (SOPs)

     

     

    YRC is an “Expert Service Division” of Mind-A-Mend Consultancy Pvt. Ltd.

    YRC Related Articles: How to Write SOPs for Marketing?, 6 Ways To Grow Your Business, How to Start a Retail Business in India, Business Expansion Plan for Small Entrepreneurs, Six Steps to Writing a Great SOP for Retail, How to write SOPs for an Apparel Brand?, How to Develop SOPs for Quick Service Restaurant?, How to write SOPs for Furniture Showroom

    Author Bio

    Nikhil Agarwal

    Chief Operations Officer

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      PROCESS AUTOMATION

      The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

      In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

      Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

      Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

      YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

      VIDEOGRAPHY & PHOTOGRAPHY

      No matter how good your product is, the customer would know only if it looks good.

      Photography includes the following steps:

      • Cataloguing your products
      • Cataloguing your images
      • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
      • Choose the right camera & lens (You may also outsource the photography to a third party agency)

      DIGITAL MARKETING

      Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

      Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

      These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

      Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

      This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

      IT INTEGRATION

      Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

      YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

      IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

      This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

      Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

      WAREHOUSE & LOGISTICS PLANNING

      • How many cities or countries you wish to sell in?
      • Where should your Warehouse be located?
      • Should you have one warehouse in each country or city?
      • Should you be having your own delivery team in your base city?
      • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
      • How should I manage the logistics if my goods are coming from different countries?
      • How should the goods be stored and barcoded?
      • How much space do I require for warehouse?
      • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

       

      At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

      We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

      Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

      UI & UX DESIGNING

      This Step involves 03 distinct parts:

      Part 1: Choosing the right Platform:

      From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

      Part 2: UX Designing:

      “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

      UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

      “As per statistics, 68% of the customers abandon the carts before payment”

      An interesting UX ensures the customer sticks on to the website for a longer time.

      Part 3: UI Designing:

      UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

      A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

      The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

      If User experience is the bare bone, user interface wraps it up with an attractive cape.

      At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

      SAMPLING & PRODUCTION

      This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

      In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

      Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

      Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

      Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

      Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

      Production Sample is made before the production which is the replica of what is going to be finally produced.

      Once you are through with all this, you are good to go ahead & get your goods manufactured.

      PRODUCT DESIGNING / SOURCING

      Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

      Product Designing / Sourcing can be done in several ways, as follows:

      • In-house Design Team
      • Freelance Designers
      • Outsourced Design Team
      • Ready Product Sourcing (From Manufacturer or Wholesaler)

      At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

      These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

      If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

      Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

      BRANDING

      Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

      Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

      It is an integral part to attract the target audience.

      ORGANOGRAMS & SOP’s

      Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

      SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

      At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

      CRITICAL PATHWAY

      Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

      CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

      CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

      At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

      BUSINESS STRATEGY & BUSINESS PLAN

      Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

      Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

      Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

      YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

      MARKET RESEARCH

      Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.