Survey on the Tools and Services to Run and Grow Your Online Business - Volo

Survey on the Tools and Services to Run and Grow Your Online Business

Thursday July 23, 2020 | Posted at 3:58 pm | By Paul Dicken
July 23, 2020 @ 3:58 pm

In this post we touch on the results of a survey into how ecommerce businesses are growing their businesses. The survey findings are published in full in the Tamebay white paper called ‘Scaling Up Your Online Business – How to Build, Grow and Industrialise eCommerce’, which you can download here.

Over 120 ecommerce businesses participated in the survey and shared what they’re doing to scale their business. The first thing we should say is that the timing of the survey was at a fascinating point in UK economic history. The survey window was the middle of February to early March 2020. The full extent of Covid-19 in China was becoming apparent, Italy and Spain were in the grip of the virus, and the rest of the world was watching carefully and pondering on its own national response.

Two weeks later, the UK had shut down. What conclusions could we draw for a post-lockdown economy from data taken pre-lockdown? Let’s see.

The survey base spans all sizes of companies, with 23% of companies shipping under 100 parcels a month, a quarter shipping between 1,000 and 5,000 a month and around a fifth shipping more than 5,000 a month. A third of companies turn over less than £100,000, a fifth turn over between £1m and £5m, and around a tenth are in excess of £5m per year. There was also a good spread across all ecommerce categories and in terms of international activities, with only 17% confining themselves to Great Britain and the balance having varying degrees of overseas exposure.

Business are using a variety of marketplaces and other channels to spread their risk, which is good to see and something we have blogged about before. For example, 81% of all respondents are on Amazon, 89% on eBay, 20% are using Shopify, 7% Magento and 4% BigCommerce.

With all this channel activity, it’s interesting to see how businesses manage their multichannel operations. In fact, it’s almost split down the middle, with 46% of companies relying on the back-office tools of marketplaces and platforms, and 54% using some sort of third party management.

Furthermore, 16% of all companies – about a sixth – use third party systems to manage their entire business. How much of these operations are they able to automate? Not much, if the survey results are anything to go by. 62% of the survey respondents are not using information or data feeds to automate their processes, with 18% of companies taking at least 20 hours a week to handle things manually. The remaining 38% are using FTP or API technology to exchange information.

Perhaps the problems lies in the supply chain, since nearly three quarters of ecommerce businesses report that their suppliers are non-automated when it comes to information provision, and very small numbers are exchanging information with their suppliers using FTP or APIs. This suggests that there are opportunities to improve operational efficiencies on the B2B side.

In terms of shipping and inventory management, 66% of companies are shipping everything themselves, with 28% using up to five suppliers to ship for them. This has implications for stock management, with 81% of companies holding all of their inventory in stock, and around two-thirds of the remainder doing back-to-back orders up to 10 times a week.

Perhaps one of the most glaring oversights in the survey is in the area of reporting and analytics. When it comes to understanding what’s happening in the business in order to make good decisions, only 7% of companies have third party ‘insight automation’ which removes the need for further manual work. The rest of the companies are either doing no reporting and analysis at all, or are having to supplement the information they get directly from the channels or other systems with their own data crunching. There is clearly scope to invest in the right technology to save on management time and guess work. (If you want to talk to us about our Vision platform, which automates the reporting and analysis of your business performance, let us know.)

Finally, and understandably, when respondents were asked what areas of their business they’d like to understand better, 59% cited performance metrics like cash conversion cycle, profitability and time to ship and so on, which was comfortably the most pressing of their plans for the future.

Tamebay concludes that many companies have been growing their businesses with ‘time and grunt work’ rather than reaching into their pockets to invest in automating their processes. If coronavirus has taught us anything, it’s that we need to be able to react quickly, be present in multiple channels and spin up new channels quickly. We can only realistically do this with the right technology, and Tamebay speculates that this will come from working with third parties, leaving the ecommerce business to concentrate on the core business of selling and expanding.

You can download the Tamebay white paper here, which we’re delighted to be able to sponsor. To explore your own plans and requirements for growth, get in touch with us here and we’ll be happy to talk.

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