eFashion Solutions Powers Brands on eBay Fashion Vault, Amazon.com
By Ina Steiner
Fashion is one of the hottest verticals in the ecommerce space right now, and eBay and Amazon are trying to replicate the latest online merchandising trends that sites like Rue La La and Zappos have made popular. But the two marketplaces are taking markedly different approaches to that end - eBay is moving up the food chain, entering into partnerships with larger retailers and brands and farther away from its C2C roots. Amazon.com, in keeping with its practice of maintaining tight control, has employed a number of strategies, including acquisitions (Zappos, Woot.com) and offering fulfillment services to sellers of all sizes.
A look at how one company is bringing brands to eBay and Amazon.com gives some insight into what's in store for high-end fashion on these marketplaces - and what small sellers in fashion categories are increasingly up against.
Building Online Flagship Stores
Ed and Jennifer Foy's company eFashion Solutions has spent the last 10 years building websites for brands with names that trip off the tongues of hip fashionistas, and the company is now working on projects with eBay and Amazon.com to bring major brands to their marketplaces.
eFashion Solutions (eFS) has raised $24 million in equity funding and provides online flagship stores for the branded fashion apparel/accessories, entertainment and specialty retail industries. The company handles everything for their manufacturing and retail clients, including buying and merchandising, design, photography, marketing, business intelligence, customer service, order management, and fulfillment functions.
eFashion Solutions' challenge is to protect brand integrity for their clients while at the same time increasing sales, so selling on sites like eBay and Amazon.com might seem risky. In an interview with AuctionBytes, eFS CEO Ed Foy explained that it's important for brands to leverage the vast amount of traffic eBay and Amazon offer, yet still maintain control of the presentation, product assortment and branding of landing pages on these marketplaces. You can't stop someone else from selling your product, so "the more product you get on there that's managed professionally, the more the customer wins, because they're seeing your product." He said it also helps to think of eBay and Amazon as search engines.
eFS, eBay and Fashion Vault
eBay has been offering eFashion Solutions exclusivity on its flash-sales micro-site called Fashion Vault. Not surprisingly, other eBay sellers are concerned about the exclusivity of Fashion Vault sales as well as the limits eBay places on Daily Deals (see, "eBay Keeps Tight Lid on Daily Deal Opportunity for Sellers" - link to article).
eBay began its foray into the world of high-end fashion last year when it began testing "flash sales" (heavily discounted sales on designer brands that last 72 hours, similar to those on Gilt.com and RueLaLa) and entered into agreements with fashion designers for exclusive eBay lines (Narciso Rodriguez, Norma Kamali).
By this Spring, eBay showed a full-fledged commitment to fashion when it launched Fashion.eBay.com along with a dedicated "Fashion" tab in the top navigation bar and special fashion shopping features.
Ed Foy won't discuss his arrangement with eBay, where eFS sells under the name StylePremium, but said Fashion Vault is going very well, and more and more brands are embracing it.
"We want eBay to be thought of for branded merchandise." And, he added, "driving sales to other sellers, it's been clear to us, needs to be part of the strategy for the Vault."
eFS, Amazon and Fulfillment
Should retailers and online sellers be worried that the manufacturers are now selling online, creating more competition? Foy said that increasingly, the lines are becoming blurred: manufacturers are becoming retailers, and retailers are creating their own brands. It's worth noting even Amazon has launched private-label brands Pinzon and Strathwood.
About 85% of eFS clients are brand manufacturers, and 15% are retailers, but Foy said eFS will be growing the retail market with a partnership with Amazon - eFS will launch its first prototype in October. "It's a very customized approach with Amazon plumbing that allows more cost-effective services coupled with eFS' very merchandise-driven platform and Amazon's technically scalable platform."
Any discussion of Amazon naturally turns to fulfillment, given the company's push to get marketplace sellers to use its FBA product fulfillment service. Foy said the fashion industry has unique challenges in that regard: garments hang on hangers, there's no standardization for the location of barcodes, and packaging is highly customized with inserts and branded boxes. "It's a hard industry to automate," he said.
Foy noted that Amazon wants to be the conduit for all ecommerce transactions. "I think they want to own physical distribution. If you place an order online, they want it to be their plumbing, their credit card processing, and if you receive a good, they want it to be distributed through their fulfillment network. Anything that you touch, they want to touch as a provider."
But for now, eFS will continue to handle fulfillment, even on Amazon.
Brands who want to sell directly to customers don't have a retail mentality, Foy said. When a retailer places an order through a fashion manufacturer, they're only going to get 75% of the order, he said - and that's not good enough for online customers, or for eBay and Amazon. That's why fulfillment is so critical for eFS, Foy said.
Inventory integrity is crucial - having the products on hand when a sale is made. Brands aren't concerned about customer feedback - that's the retailers' problem in their minds. "But inventory accuracy is number one," he said.
However, eFashion Solutions' own customer feedback ratings on eBay and Amazon leave room for improvement. Foy said, "With almost 6000 vendor feedbacks, we maintain about a 99% positive rating but always strive to improve. One of the issues in limited time sales (72 hours) is that replacement isn't possible after the sale is complete, which is understandably frustrating at times for customers."
Large Players, Small Players and Marketplaces
While marketplaces like eBay and Amazon.com are focusing on providing high-end fashion to their customers, they must be alert to the problem of counterfeit goods. One way they may try and reduce the risk is by inviting brands or brand-approved services on their site directly, another advantage larger companies have over smaller players.
eFashion Solutions has another interesting advantage over some other retailers: 10 years ago, it made the decision to operate in New Jersey where there is no sales tax on apparel. Although legislation is likely to change that due to pressure from states who want the sales tax revenue from online transactions, it demonstrates the sophistication and foresight with which large retailers operate online.
As fashion continues to be a priority for eBay, Amazon.com, daily deal sites, and even social media sites Facebook and Twitter, expect things to get even more interesting, and even more challenging for the small, online-marketplace seller.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
You may quote up to 50 words of any article on the condition that you attribute the article to EcommerceBytes.com and either link to the original article or to www.EcommerceBytes.com.
All other use is prohibited.
Email this story to a friend.
1 of 7