E-Commerce & Textiles

Supported By

By Zulf Choudhary of

Content1.About Us2.The Global Challenge3.The Payments Market4.The Solution- Ecommerce5.ERP6.Examples7.Getting Started8.Building Blocks Of Success9.The Key Factors10.Financial Risks11.Risk Calculations12.mCommerce13.Types Of Payment Providers14.Actual Costs15.Other Factors16.Conclusion17.Appendix List

• Founded in 2005 University of Manchester

• 7 key staff for project and IT development in UK

• Public sector & technology delivery partners

• FSA regulated to issue e-money

• Custom and Excise Licensed Money Transfer Agent

• Key Strategic Partners

• Software outsourcing offices in China 45 staff

About SpartaPay

BSC Finalist 2008 In 2 Categories

Best EEC Project Winner 2007

Finalist 2005Orange Finalist 2009 In 2 Categories

The Global Challenge

•US$1 trillion worldwide buying clothes. Around one third of sales were in Western Europe, one third in North America

and one quarter in Asia.

•The UK exports 1.15 million tonnes of clothing and textiles each year, comprising fibres, fabric and some completed products – mainly clothing and carpets.

•UK Consumers spend about £780 per head per year, purchasing around 2.15 million tonnes (35kg per person)

•Very fast changing market place, styles, fashions & technologies

• High goods return risk such as 28% (from. N Brown)

*Source http://www.ifm.eng.cam.ac.uk/sustainability/projects/mass/uk_textiles.pdf

The Payments MarketThe internet has changed consumer buying behaviour; what, when and how they pay. Merchants must react to these changes or fail. Some Facts:

•£89.6bn was spent online during 2010 (IMRG, January 2011) •21.3m people now shop online in the UK, spending an average of £661 each in the last six months (BMRB, August 2008) •By 2011 32m UK consumers will be shopping online. The value of goods they buy online in 2011 will add up to almost £52bn. (Forrester, UK eCommerce Forecast 2006-2011, March 2007)•Over 3.5 million people bought online on Christmas day in 2009!BMRB, Feb 2009•App sales-firm Gartner, mobile app sales topped $5.2bn last year, but this

year that number will leap to $15.1bn. •Gartner sees that figure growing exponentially to £185bn by 2014

Source: http://www.iabuk.net/en/1/iabknowledgebankaudiencefactsandfigures.html*http://www.atelier.net/articles/juniper-mobile-application-market-worth-25b-2014

So online and mobile is where the money is.

The Solution-Behaviour & ecommerceThe fact buyers do not purchase apparel online as they do music or DVD etc does not mean they cannot be driven to the shops, retail outlets and venues where you can sell directly to them!

Technologies Strategy

• Website• Apps• Mobile apps• Social networks• Traditional marketing

• Digital• Offline• Branding value• PR & creating loyalty

Driving Consumers to where they will

buy

Solutions To Suit YouTextiles sector is both retail facing (B2C) and wholesale (B2C)

B2C B2B

• Shops• Website• Mail Order • Apps• Mobile apps• Social networks• Trade shows etc

• Cloth Manufacturing• Garment assembling/making• Transport• Wholesales• Technology- nano and smart textiles• Import & export• Quality Controls etc

Drive e-processes

• Administration• product reservations• Stock management• Fast and efficient purchase• Transactional platforms

Enterprise resource planning - Wikipedia, the free encyclopediaEnterprise resource planning - Wikipedia, the free encyclopediaEnterprise resource planning - Wikipedia, the free encyclopedia

Ecommerce takes two forms

•ERP- Enterprise resource planning-large firms

•CRM systems-small firms

ERP

•MRP/CRP (Material requirements planning & Customer relationship planning)•Sales and Marketing•Master Scheduling•Bill of Material (BOM)•Purchase•Accounts Payable•Shop Floor Control•Human resources (HR)•etc

Options-and costs

Total Process control

Small ERP Large ERP

Low Cost/less control High Cost/ Total control

Example: ARGOS• Brand value

• Merchant account

• Drive to stores

• Up sales

• Check items

• Post code checks

• Stock checks

http://www.argos.co.uk/

Example: M&SHow• Brand value

• Returns Policy

• Past user Experience • Direct merchant account

http://www.marksandspencer.com/

Small Firms-Getting Started

1. Apply for a merchant account. This is an account set up with a bank to process credit card orders from customers (or via Payment Service Provider -PSP).

2. Negotiate the costs with bank or PSP.3. Receive access to secure software (PDQ machine-(Payment Documents

Quickly) or codes to put your website to process cards.4. Done!5. DIY or get someone to do it for you?6. What channel to you –website, mobile, store or all.

Options-and costs

1. Apply Directly- Fees, contracts, shopping trolley, secure transactions area etc.2. Apply via PSP-They will provide this for you- Buck Net, PayPal, WorldPay etc3. Joining a shopping mall. eBay, iTunes, OVI, etc

Merchant Accounts

Direct Merchant Indirect Merchant

Low Cost/Flexible High Cost/ Inflexible

Example: Vintage FabricsHow?

•Indirect merchant account

•PayPal & EBay

http://www.vintagefabricmarket.co.uk/

How Ecommerce Works

Building Blocks For Success!

Buyers Bank-the issuer

Merchants Bank-the acquirer

Internet Order forms & Shopping cart

Secure Area for cards data SSL

EPos Fulfilment & Logistics

Accounts and management of

e-commerce

SECURE DATA EXCHANGE by VISA or MasterCard

Terms & Conditions

Website/Mobile App/ Retail

Financial Risk

A bank looks at their exposure to risks to you and your customers before agreeing to give you a online account. Why?

• Fraud and charge backs = cost of doing online business with you.• A look at charge-backs – when a customer demands a refund from their credit card company.• Banks protect themselves against charge-backs by retaining customer payments for around a month before crediting your account• Internet transactions can be prone to fraud.• You may need to lodge a bond to cover yourself against fraud.• Good terms and conditions on your website will help.

In perspective: Fraud represents only 15 to 30 minutes of loss in a full year of trading for many banks. So why concerned?- Brand Reputations

Setting Up Ecommerce Systems

•Channels to marketWebsiteStoreSMS MobileSocial WebsitesPoster and PR campaignsApp stores

•CostsEach channel above has a costSoftware off the shelf or bespoke?Can you pay for all or just one channel? Costs vary from a £250 to £10,000,000! (Facebook cost £6m) In house or outsourced expertise?Who manages the complexityRisks of system failure or parts

Before starting consider how will you drive traffic (buyers) to your site?

mCommerceCollecting Payments via mobiles-just a summary

Has its own risks

• Mobile provider gateways and shopping malls -iTunes, OVI etc• Reverse Billing-cost to your mobile account-BT• Mobile banking-Banks• eticketing via SMS, concerts, travel etc.• Premium rate lines- adults, gambling- all telecom companies• Mobile Payments fees 15% to 30% per transaction

Why?

Because of:

•Convenience•Simplicity•Direct into hand-SMS

Types Of Providers-ExamplesCredit & Debit Bureau Provide Extras

Bucks Net Payment Gateway Shopping cart, reports etc WorldPay Payment Gateway Shopping cart, reports etc

PayPal Payment Gateway Shopping cart, reports etcNetbanx Payment Gateway Shopping cart, reports etc

Merchant account providers- Streamline Merchant ID - Major Banks Merchant ID

Mobile- Apple Inc Mobile bureau service- Ovi Store Nokia devices

- Pay2Go Mobile design for e-commerce

Postal OrdersBanks/Post Off Cheques and postal orders

Cash- PayPoint Cash collection for bills- PayZone Cash collection for bills

Shopping carts etcWeb design and shopping cart providers (Actinic etc, OS Commerce) etc

Actual Costs

Example of costs

Set-up Recurring Costs Charges

Bank Acquiring £200 £10 2% - 3.35% per credit card transaction £0.25 - £0.35 per debit card transaction

NetBanx PSP £75 £10 from 1% to 4% per transaction

Worldpay £200 £360 (annual) 4.5% credit cards, £0.50 debit cards

Main costs are listed below but are not relevant to all products

• Setup Cost: ranges between £50 and £250, i£120 is the average.• Annual Cost: normally around £150 but often not applicable.• Monthly: The most standard charge especially from acquiring banks, around £10-25 pm.• PSP: Can be a commission of as little as 1% but often about £10 per month or 3-4%.• Transaction Charge: 2.79% for an established business but up to 4-7% otherwise.• Bond: dependant on exposure level but is often negotiated down.• Charge back £7 to £29 for each item• Mobile Payments fees 5% to 30% per transaction

Other Factors

•Website design-make it mobile compatible-clear and direct guide to buying page!

•User experience-MAKE IT SIMPLE STUPID!

•Users convenience-make it easy

•Marketing and PR

•Quality of Service

•Mobile design-simple to use and well designed-guide users to buying area!

What sets you apart from others? What is your unique selling point in the view of your customers? How do you stand out!

Examples: Call of Duty Game, iPhone, Amazon, Tesco, Micro Direct etc. Look at how others have done it.

Its all about good design and user experience- remember a good ecommerce business is an orchestra of many parts!

ConclusionElectronic commerce is about online selling, taking users to a place they feel secure and happy to buy goods or service.

Many issues and challenges can trip the unwary but if you think rationally and positively you could make millions.

Consider the following:

- Your fast changing market place- Your customers buying behaviour- Online and mobile channels (do not forget that TV, radio and newspapers all depend on e- commerce of one type or another!)- Look at your budget.- Look at all the risks.- Decide on payment method ideal for you.- Look at the at total user experience with you.- Negotiate the best deal from your payment provider.- The set-up costs may been high and the work daunting but its worth it.

The retail market is worth over £15 billion now and £185 billion in 2014!

Good Luck in 2011

Thank you for listening

If you have any questions please contact meZulf Choudhary

Telephone: 0161 306 5848

Email: info@spartasoft.co.uk

Address: SpartaSoftUniversity of ManchesterArch 29, PO Box 88Sackville Street www.spartasoft.co.uk

Appendix-List of Services Providers

Name AddressAllopass http://www.allopass.com/ukBuck.net http://bucks.net/ChronoPay Bureau http://www.chronopay.com/DataCash http://www.datacash.com/ePDQ Barclays bank http://www.barclaycard.co.uk/business/Moneybookers LTD http://www.moneybookers.com/app/Netbanx http://www1.netbanx.com/NoChex http://www.nochex.com/PayPal http://www.paypal.co.uk/ukPayPoint http://www.paypoint.co.uk/PO MoneyGram http://www.postoffice.co.uk/Splash plastic card http://www.splashplastic.com/Streamline http://www.streamline.com/SecureTrading Merchant Account http://www.securetrading.com/SecPay-owned by PayPoint http://www.paypoint.net/secpay-payment-gateway/RBS WorldPay http://www.rbsworldpay.com/Apple-mobile http://www.apple.comOvi Store-mobile https://store.ovi.com/Icon-mobileGuide sector guide

http://www.iconmobile.com/sector_guidetextile___clothing_2010

Source http://www.electronic-payments.co.uk/solutions/

This is not an exclusive list-please search the web for more providers