Suppliers resist online logistics models


A leading online retailer warns suppliers not supporting alternative distribution models may get left behind

Suppliers resist online logistics models
Adapt or be left behind

By Sean Muir | June 29, 2012

Suppliers are still reluctant to embrace online-friendly supply chain models despite a continuing shift in the way customers buy, according to a leading online retailer.

Online retail guru and co-founder of TheNile.com.au Jethro Marks tells SupplyChain Review that suppliers’ fear of
is still a major barrier for the online retail sector.

"More often than not when we start to speak to suppliers, they either have a channel conflict, are not interested in the online space, are just not up to giving the data that we need, or just can’t distribute fast enough to be able to give us what we require to sell online," Marks says.

"Those companies have got to come to the party - they can continue along the road they are on at the moment, but at some point they are going to get left behind."

TheNile.com.au is one of the internet’s many burgeoning success stories.

With the largest store on eBay.com.au and the second largest bookstore on eBay.com supported by a global supply chain, The Nile has moved more than a million books on demand to more than 700,000 customers in the past three years alone.

But despite the company's success, Marks says
some suppliers still fear they might upset major retail players by using alternative distribution channels.

"Let’s say 85 percent of their business flows through traditional channels - they are very wary of something that might upset the apple cart,"
he says.

Marks
says Australia is still behind some developed countries when it comes to
supporting business models
for online retail.

But he says the pressure is now on more than ever to adapt.

"Across every single retail category there is going to be more and more retail done online and the way you do business online is not the same way as it has been done in the bricks and mortar space," Marks says.

"I think it is just the way that it is going, and this market might be five years behind, but the pressure is still on them."

"There is a change and shift in the way customers buy and what customer expectations are -
it’s just one of those things that gets picked up quick or you end up in trouble."

This week, Big W, Bunnings, Coles and Super Retail Group all reportedly blamed the GST-free threshold, trading hour restrictions, and labour laws for preventing them from competing on a level playing field with the online sector.

For the full article on online retail and TheNile.com.au read the upcoming edition of SupplyChain Review Magazine.

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