Clarity's Chris Reddick (President and CEO) and Ron Halversen (Vice-President of Sales and Marketing) discuss the importance of stringent governance and business policies for your marketplace.

Part 6 of an 8-part series (Return to Part 5)

RON: Let's jump into governance and business policies for marketplace eCommerce. This, for me, is one of the most important things, right? Because if you have an issue—and we've talked about this in multiple past videos, where I went on eBay and had a seller screw me out of something, then I didn't want to report him because then I worried about him giving me a bad review, even though he's the one that went back and violated policy, things like that.  

You've got to have governance and policies in place that work and address the types of issues that might come up. So you need to be going out, looking at all your competitors. You need to be going out looking at other marketplace websites, and you need to be reading their governance and their policies. And you need to understand how they operate, and you need to be taking the best parts of theirs and including additional things that you come up with when you come up with yours.  

This might be the thing that takes a very, very long time to come up with. So while your vendor is actually working on the marketplace platform, while the designer's designing the new skin, while you're working on products, while you're working on relationships to get all the vendors signed up, and while you're working on commission days and working on reports.  
 
I saw a video that Chris did this week. I was out on the YouTube channel this morning. He's got this tremendous video called “How to Maximize Auction eCommerce Vendor Engagement.” It shows the coolest reporting I've ever seen ever for any type of platform, and you can have that stuff. So if I remember, I'll put a link to that video, but if not, go check it out on our channel.  
 
It's amazing, the types of metrics and the types of reports that you can have, those are the things that can be amazing. So while you're working on all of that and the team is building all that out, focus on pulling together your governance and your policies that are literally going to run the ship. When the ship comes aground, when we're heading towards a tidal wave, when we're heading towards the iceberg, when we're heading towards a rock, when there's another small boat in front of us. All of the different scenarios that could happen as we're trying to sail through the ocean on this business plan: How are you going to handle each and every one of them as you come upon them 

Remember that this is not going to be something set in stone. You're going to have to change, because your business is going to change. Your eCommerce business is going to grow, things are going to change over time. You're going to come across scenarios over time that you're going to have to be flexible with. You're going to have to figure out how to work through them, and then you're going to want to document them and put a policy or a regulation in place that governs how you take care of that in the future. This should be a living, breathing document that controls and governs your business.  

So let me turn it over to you, Chris, and go ahead and expound on your definition, anything that I define there. And then if you want to dive into anything else technically about this, go ahead.  
 
CHRIS: Absolutely. I think this is such a key point for eCommerce marketplaces, and really any site nowadays. You can really think of governance and business policies and turn it on its head and say, you want to reduce the friction and you want to make everything possible automated and self-service. And this is really at this at the limit where you're going to provide true value to your end-users.

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CHRIS: You can have all the best intentions in the world, you can have all the greatest ideas and the most value in your niche, but you really can't deliver that for all of your different users that are working with your marketplace unless you have self-service, unless you have automation, and unless you can deliver it consistently at scale. And that's exactly what you described, Ron. And I think it is so critical for folks to take the time and just think this through for your business.  

What's really helpful here is working with a team who have gone through this process many, many times, executed on it in production, and then made changes, that are researching it constantly. Certainly, we would welcome the opportunity to collaborate with you in this way. But whoever you work with, please make sure that you select a team that has this type of experience that we're bringing.  

Ultimately, the point here is that you want to get through each of the steps in the process, just like you described. And I think you said it very well, so I'll just keep it short and sweet and just say: Pretty much everything in the process can be automated, or at least the friction can be massively reduced. And you want to really think about this from every different angle or vector, if you will, within your B2B or C2C marketplace.  

How are the sellers thinking about things, not just what are they doing, but how are they thinking about it, how are they perceiving it, and how can you influence that consistently? Because if you can get people to be on a higher plane of thought and executing at a higher level as sellers and maybe operating with more integrity, operating with higher quality standards, quicker turnaround times...well, this is going to be an upward spiral and it's going to be same thing for buyers. And you get more buyers because they find it more dependable to work with in your marketplace. And how can you set up infrastructure to monitor this? And like you said, Ron, look at the reporting.  

So there's a lot of depth to this. We certainly go into it in a lot of detail. It's a key aspect for your marketplace to really make it into an upward spiral.  

RON: Yeah, exactly. And I'll give you a real-world example here. I went on a new marketplace I'd never bought on before. About two weeks ago, my brother swears by it, and he's bought thousands of things on there. So I said, okay, I'll try it out.  

I had been looking—and I think you guys have heard me in past videos. I was a DJ many, many years ago back in college, and so I'm big into vinyl, so I have a great vinyl collection. And I've been looking for this particular album. And if you guys are really interested, it's Motley Crew’s Theater of Pain. I finally found it, and right now it's going for about 100 bucks, which is a lot on vinyl when you're like me trying to collect.  

So I found this great deal on this piece of vinyl. I ordered the vinyl, all excited, was really pumped about this new marketplace website because it was the first marketplace where I actually found it at a reasonable price. And the marketplace did a really good job of automating almost everything. Within three days it was an email. “Hey, we've notified your seller that they had to ship your item by today, so it should have shipped. And then it was like notification. “We got a notification that your item has shipped from the seller. I'm like, “Hey, that's really cool.” 

Well, then three days later I get a notification that says, “We can't pay your seller until you rate the seller, you're behind.” And I'm like, I haven't got the item yet. And then I get another one that says,” Hey, you're not meeting the policy because you haven't raided the seller yet and we can't release their funds.” I'm like, I still haven't got the item yet.  

Finally, like seven days later, I get the shipping tracking status, the tracking status for the last nine days has been “waiting for estimate from carrier.” I don't even know what that is. So it looks like FedEx came and picked it up and the FedEx person went, “Ooh, nice album, it's mine.” And they stole it and never updated or never did anything. And it's been nine days.  

So here I am two-and-a half weeks later, I still don't have it. I poked around on their site six different places and there is no scenario—they've got all these automated scenarios—there is no scenario for me other than just canceling the order. But I want it and I want to get it. And it took me three different times poking through the website before I could find a place to notify the seller.  

I sent the seller a note like four days ago. Still nothing back. And now I don't even know what I'm doing. I don't know if my money's gone. I don't know if I have to request to cancel the order, or is it a refund at this point? Have I paid for it? I don't know.  

So I probably am never going to buy from that marketplace site again, even though my first initial couple of days I was completely elated and it was amazing and I was excited that I found this new place. And here I am, just complete sour taste in my mouth, no governance, no policy to deal with my scenario, and almost no recourse because I don't know what to do and I don't have a phone number to pick up and call somebody.  

So that's where the governance and the business policies come into play. You have to go through these scenarios. What happens when X? Chris said it great. You want it fully automated, you want to make it self-service. So how does Ron the buyer deal with the seller? Is it the seller's fault? I don't know, because they claim that they gave it to the shipping carrier. But the shipping carrier hasn't done anything for nine days. So I can't believe that unless the shipping carrier picked it up and it fell down in a slot in their truck and it never made the main office and it just disappeared. I mean, I have no other way to know what happened. 

Continue to Part 7 to learn about maintenance for a marketplace website.