At the September Epik Developer Conference, we announced that Epik would be shipping full eCommerce in Q4. Well, I am delighted to announce that the first eCommerce portal to go live is EmergencyFood.com. The platform is officially launched and we believe that this is the single largest leap forward in capability since the start of shipping for Product Portals just one year ago. With more than 8,000 Epik Stores already live, the future is brighter than ever.
The Epik solution for Full eCommerce is a robust and feature-rich. It provides support for orders, shipping, billing, returns, discounts. It is also designed for flexible commerce, combining sales from inventory, dropship and affiliate all in one integrated portal with expanded content and graphics. Each eCommerce portal also comes with centralized customer service and logistics from Epik Operations center in Sandpoint, Idaho.
Full eCommerce is a large step forward
So why did we not start with full eCommerce in the first place? When we first set out to build “Federated Amazon”, we knew that it would be possible to do full eCommerce across 100,000 product categories. However, the execution risks of such a strategy would be enormous. Affiliate stores offer a cost-effective and low-risk path to verify demand and determine which specific products sell well, and have good prospects to continue to sell well. However, it takes a while to build serious profits at 18 cents a click. What we sacrificed in short-term upside was more than offset by controlling short-term execution risk. We now know which products sell, and can now intelligently direct a sourcing and fulfillment strategy for those products. Also, Developers can now make intelligent choices about which Portals to sell versus which ones to Develop into Full eCommerce.
Sourcing Products and Shipping Orders
One of the largest new tasks when building eCommerce portals is managing product sourcing. This is a large part of what Epik commits to do when we take on a new eCommerce portal. For example, with EmergencyFood.com we have secured dropship relationships with many vendors which allows for competitive pricing with worthwhile margins. Epik will also inventory some products where the margins are sufficiently high to accept inventory risk. The question of inventory versus no-inventory is fundamentally a question of risk-adjusted return. What we have found is that the process for securing products is dramatically shortened by already having a site that is live, ranked highly on organic search and receiving meaningful traffic. In many cases, the vendors actually come to us, particularly Chinese exporters. We have established a dedicated department in our Sandpoint, Idaho operations center, led by eCommerce veteran Troy DuBose, that is focused on supplier management. Our initial focus is on dropshipping, however we expect to begin warehousing products by Q1 2011. Epik Operations Center is a block a away from the operations center of online clothing retailer Coldwater Creek. There is an abundance of warehouse space in Sandpoint, with good proximity to major shipping corridors, in particular, railroads, but also interstate highways.
Affiliate or eCommerce — which ones is right for you?
At Epik, we now have more than 8,000 product portals live. In the next 12 months, we expect this to grow to between 50,000 and 100,000 stores. Why? Our analysis has indicated that there are approximately 100,000 unique product categories that are sufficiently large to justify having a dedicated online retail presence. If you have a great product category name, the operative question will be whether to start with affiliate-only or make the leap to full eCommerce. That decision is largely a financial decision. The cost of an affiliate store costs just $249 as a one-time setup fee with no additional investment required. The setup cost of full eCommerce is $2500 with much of this cost related to managing development of the supply chain. If you have previously invested in an affiliate store, Epik deducts this prior cost. As such, in most cases, it will make sense to start with affiliate and upgrade to full eCommerce once some base level of traffic has been achieved.
Try EmergencyFood.com today and save 15%.
These are unusual times that we live in. If you or your family has been slow to implement a Disaster Preparation plan, now might be a good time to work on that. For the month of October, shop at EmergencyFood.com and save 15% with the promotional code epik. Feel free to send us any feedback on your shopping experience by contacting Sean Hayes, President of EmergencyFood.com at firstname.lastname@example.org.
Plan for an Epik store of your own!
An eCommerce store is a larger undertaking than an affiliate store. As such, it requires more planning and thought. Not only do we need a great domain name with traffic, but we also recommend focusing on a category that resonates with your personal interests and goals. As the business grows, there will be more decisions around which inventory to carry, which brands to carry, etc. To get a fuller appreciation of the opportunities in eCommerce, I recommend spending a few hours on an international trading site like AliBaba.com. You may be surprised to find the large gaps between what you can expect to pay for a product at your favorite online retail store and what the cost of that same product is when sourced from the manufacturer in bulk. That is a great way to identify category opportunities where significant profit opportunities may exist as eCommerce becomes more federated and as manufacturers seek a more direct relationship with their end-customers as we are certain is about to happen in the next phase of eCommerce. The Epik Store platform is in the right place, at the right time at the right price.