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Category Archives: eCommerce

Hoverboards are very popular holiday gifts this year, but the stories about the boards that explode are all over the news.  Many retailers including Amazon.com and Target stopped selling them, and several commercial airlines banned them aboard their aircraft.

So what happened in the manufacture of these items to make them so dangerous? In the reported incidents, the lithium ion batteries in the hoverboards caught fire while charging or just riding them. The reasons for the combustion process is well-known when a battery is defective. The problems with these batteries were identified in laptops and cell phones a few years ago.  What isn’t so transparent are the sourcing and manufacturing processes for the boards being produced in China.

Hoverboards are new, exciting and popular products and this combination creates a frenzy of manufacturing opportunity for Chinese manufacturers. Because of the popularity and the potential for high volumes and high profits, knock-off brands proliferate very fast in the extremely competitive changed to avoid patent infringement laws. The raw  materials sourcing for knock-offs may come from completely different suppliers. Cheaper knock-off products means cutting corners in the factory to keep production costs low.

US safety standards are not all in place yet for these new products. US Customs may be allowing imports to enter the US based on safety standards for similar products, following the current requirements for imports. Some manufacturers may have obtained UL certificates on certain component parts, but not for the hoverboard as a whole. Raw materials such as the actual batteries may be knock-offs, too. You cannot trust the  well-known top brands either. The high demand is likely to cause sourcing from multiple Chinese factories with limited experience and untested component suppliers. No Chinese agency is overseeing the quality of exports from China.

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Montgomery County Fire and Rescue

2013-01-23 05.43.24I just finished a consulting project for a major international brand that wants to enter the eCommerce market in Russia.  Although not new to eCommerce, my client was looking for a more in depth review of the possibilities and capabilities.

Among the many challenges with logistics in Russia, some are unique requirements that don’t exist in other places.  For example, when customers order fashion items over the Internet or via a call center, they expect overnight delivery to locations in Moscow and St. Petersburg.  But this overnight delivery also includes a specific appointment time and a fashion consultant who delivers the goods to the customer’s door and then waits while the items are tried on.  I suspect they also provide feedback….”That makes you look fat”  etc…

Russian customers are among the most demanding anywhere in the world.  But there are other factors at work here, too.  In order to deal with significant petty theft, packages would never be left on someone’s doorstep. They must be delivered and signed for in person.  Credit cards are not widely used via the Internet or over the phone in Russia, so the majority of transactions are done COD.  Russian Post is often slow and unacceptable for customers of eCommerce. Call centers are expected to follow up with every customer to assure satisfaction with their purchase.

The logistics challenges in the Russian market are significant.  The overall supply chain has to be flexible enough to accommodate creative solutions to inventory stocking levels, security, customs clearance and currency exchange.  Returns are very high because customers will often order multiple sizes and reject the unwanted merchandise which then must be returned to the fulfilment center and restocked expeditiously.

To address these issues in Russia, some eCommerce companies have developed fully integrated end-to-end eCommerce businesses including: web store development, web site and shopping cart management, call centers, fulfillment centers, delivery services and fashion consultants. Necessity is the mother of invention.

eCommerce can be a challenge in any country, particularly the Third World where delivery capabilities are underdeveloped. But there is no stopping the double-digit growth of on-line shopping around the world.  The unique requirements of B2C business are yet another avenue for which Supply Chain professionals must gain competence