Procurement can help businesses with a lot of things. It can help increase profit, it can help businesses source out top quality resources for their product and services and it can also help them build their brand – believe it or not.
As you would already know, procurement is not limited to sourcing, negotiating and obtaining goods and materials for product and services, it can also help ensure fairness amongst businesses in different industries, especially those that aren’t as heavily regulated.
This article particularly, will enlighten you on how procurement can be used as a way to ensure fairness amongst the e-commerce industry.
Regulations in procurement by government can help businesses have a fair go at building their empire
The problem with e-commerce is that anyone can sell anything online and buyers cut out the middle person, buying straight from factory. While this might seem like heaven for buyers, there are also big problems involving scams, security detail hacks and faulty products.
Taking into consideration that e-commerce is a growing and shows no signs of slowing down, governments should crack down into placing better procurement regulations for e-commerce businesses.
For example, have an approved sticker/label online for suppliers that comply with the industry standard – products checked for quality, products according to online description and insurance that all sensitive details are kept private.
While this might come as problematic for suppliers who just want a quick setup, it will work in other’s favour. For example, businesses who worked hard to ensure their product quality is up to standard will only need to register and confirm their status with the government procurement body and won’t have to compete so hard at proving that their product is not a scam.
This indirectly ensures fairness amongst the e-commerce industries – where those who comply to the product quality standard will stand out better and will not have to justify their higher price to online buyers.
Procurement can help e-commerce businesses obtain their product at far less cost
While some sites like Alibaba and Shopee allow user to either buy straight from suppliers and sometimes personal sellers, there are often no guarantee of the quality. Buyers who want insurance that they are getting the bang for their bucks often shop at more certified e-commerce hubs such as Zalora, Lazada, Asos and others.
While these sites take pride in the quality of their products and serving customers original, high quality products, they still need to obtain their good from somewhere else hence why despite having a cheaper price than retail, their price are still not “too good to be true”.
That being said, they still need to make as much profit as possible without having to drive prices up or lowering the price too low in order to compete with other certified e-commerce hubs. This is where procurement will help ensure these e-commerce hubs get the best price and yet still maintain a form of fair competition between different sites.
Because procurement calculates not only the product cost, but delivery cost and packaging cost, e-commerce sites can come up with a lucrative price depending on their geographical location. For example, Asos products might be expensive for people in Malaysia as they usually cater to the UK but Zalora for example will store somewhat similar products that are more affordable for people in the Southeast Asian Region.
The fact that Zalora for example does not deliver to the United Kingdom and vice versa for Asos and Malaysia makes it fairer for e-commerce sites that are competing internationally.
Procurement helps local businesses/ entrepreneurs grow their e-commerce brands
Sure there are a lot of e-commerce that sells international brands like Nike and Michael Kors but there are also e-commerce sites that work hand in hand with local entrepreneurs to ensure their procurement cost is low and their product quality is high.
Take Fashion Valet for example. Fashion Valet is climbed the ladder pretty quickly to becoming the no.1 e-commerce store for modest fashion in Southeast Asia and when one of the founders, Vivy Yusof first started, she went from fashion designer to fashion designer to find local fashion designers that would collaborate with her on her online fashion store. Now worth millions, Fashion Valet still stays true to their roots and always tries to work with local Southeast Asian fashion designer to deliver quality modest fashion to their supporters.
E-commerce might take out the middle person (retailers) outside of the picture but they are, together with procurement providing better opportunities for local talent to build a brand and a name for themselves online.
Procurement might not seem like a big factor in e-commerce success but it definitely does help ensure fairness amongst businesses in the e-commerce industries and with technology improvement, procurement can do so much more for e-commerce than just ensuring fairness.
ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.