With the growth of online changing consumer shopping habits in the UK, and it was around 20% of retail sales prior to covid 19, it is little wonder that most charity retailers have an online operation already. While the lockdown has dramatically affected retailers, especially charity retailers, it has also had an interesting side effect which no one seems to be discussing – the immediate impact on consumer shopping habits. It is highly likely to dramatically quicken the already changing consumer shopping habits, driven by a mixture of convenience, and now influenced by the fear of covid 19 and the inconvenience of social distancing increasing the growing trend of purchasing items online.
Therefore there is no better time for all charity retailers to review their online operations in detail. Most charity retailers have developed their online business around mainly eBay and Amazon, which makes sense. Some of these charity retailers have grown their online operations considerably from where they started, which, based upon the changing consumer shopping habits, again makes sense.
Many charity retailers have really embraced the changing consumer shopping habits by growing the online business operations within their charities. However, the scalability that should be expected by growing a charity online business for the vast majority is proving far more difficult to leverage the increased size of operation into proportionately higher profits.
Today’s charity online trading the reality
The reality is while almost every charity retail online operation has grown their sales, their profits have not generally hit the heights most are hoping for, especially when all of the direct and most importantly the indirect costs are fully considered. Of course there will be many reasons for this, these are the top four that most people focus on for good reason tend to be:
- Product category hierarchy on eBay
- Quantity and quality of listings on all platforms
- Pricing ‘buy it now’ vs auctions on eBay
- Volunteer numbers and capability
Whilst all of the top four might well be on most managers’ minds, because having enough people and improving the technical aspects of the job in the forefront on everyone working within the charity retail e-commerce departments minds and, of course, they are all important.
Far more complex, and often harder to fix, is the efficiencies within charity retail e-commerce departments, and this becomes more important and difficult as a charity retail e-commerce business expands. They are:
- Lack of platform integration – eBay & Amazon with a logistics provider (parcel service)
- Supply chain inefficiency
These two aspects can individually add quite a lot of indirect costs and generate considerable inefficiencies. For those people who understand the principles of Lean 6 Sigma, this is an obvious statement. For the majority these are the main principles of how to gain competitive advantage through Lean Six Sigma:
- Streamlining processes results in improved customer experience and increased loyalty
- Developing more efficient process flows drives higher bottom-line results
- Switching from defect detection to defect prevention reduces costs and removes waste
- Standardising processes leads to organisational “nimbleness” and the ability to pivot to everyday challenges
- Decreasing lead times increases capacity and profitability
Charity retail e-commerce supply chains vary considerably depending totally where the e-commerce operation is based in relation to the donations.
All charity retailers trading online could and should review all aspects of their operation to reduce inefficiencies. There are three key actions that can improve efficiencies and these are:
- Lean supply chain
- Reduce the number of times you touch a product
- Integration of the logistics service and selling platforms
Lean supply chain
There are several different solutions when donations and the e-commerce operation are on different sites and all should be considered carefully. Too often I find charities moving donations to e-commerce departments that are not ever going to be listed. Here are the top three suggestions to improve the supply chain:
- Product selection in remote location: Use WhatsApp to communicate between the donation location and the e-commerce department, with pictures before moving any donations.
- Product selection criteria in remote locations: Set a minimum selling value for considering moving donations and only move items that would sell for £10 an item more online.
- Listing in location options: You can list in multiple locations or use Zoom to review possible listings and list centrally. If you have platform integration and if you set up the system correctly you can have the logistics supplier collect from multiple locations.
Reduce the number of times you touch a product
It sounds really obvious to reduce the number of times a product is touched before being despatched, but just count and you will see the challenge.
- The person who discovers the donation to sell online products.
- The person who either reviews the donation in person to see if sellable or uses a medium like Zoom or WhatsApp.
- The person who lists the product on the best platform and puts it in its allocated slot within the warehouse.
- The person who packs the sold item.
Any other additional handling of the product is inefficient. The key is to remove any additional handling by changing or refining the processes.
Integration of the logistics service and selling platforms
There are three key actions that cover and can improve efficiencies. There are solutions for both, and I would strongly recommend integration of eBay and Amazon with a parcel service so you can dramatically reduce the processes once a product is sold using the parcel service software (which is free) or other available software to improve efficiency and reduce human error.
What is there not to like about something that improves efficiency with no additional ongoing costs.
There several different solutions available, however Skyline Business Services have partnered with Royal Mail to offer this complete integration automated parcel despatch software integrating with eBay and Amazon. The software is free of charge to use for all charities.
Many charity retail operations across the UK of different sizes are using the covid 19 pandemic problem to have the e-commerce integration completed remotely so that they can trade safely, now and in the future. No more trips to the post office and reduced covid 19 fears … plus more efficiency.
With the larger charity retail e-commerce operations, the efficiencies of scale can then be leveraged. A good side effect is it automates the communication with the customer as well.
Charity retail e-commerce is going to play an increasingly larger part in the future of charity retail and there is no better time to review your own operation.
We offer free advice without any obligation. We are charity retail online trading experts so if you would like more information or discussion, please contact us.
Charity Retail Training & Support Services are part of Skyline Business Services, with a full range of support services to help all charity e-commerce businesses.
- Selling online Training.
- Selling online Manuals.
- Best practice guides and advice.
- System integration.
- Supply chain configuration.
- How to start selling on eBay.
- Start-up packages.
- Efficiency packages.
Author of ‘The Science of Charity Retail’
Skyline are a UK Registered Learning Provider