The concept of online stores or e-commerce market place has matured over the passage of time with the advent of Internet. The virtual stores are turning out to be the business model for the millennium. As per the general perception, the pace with which the e-commerce is growing, it might outpace the business of physical stores one day. However, the recent report published by Forrester suggests that the presence of location of a physical store online enhances the total sales of the online stores. The estimated sales value of physical stores alone is calculated to be the 45% of the total sales value.
In general, the franchisee and franchiser relationship in the online business is maintained by the constant flow of information for the availability and replenishments of goods and services by a concrete enterprise resource planning and a supply chain tool. This tool enables franchiser to know the inventory status of the franchisee once they update their sales data regularly. Subsequently franchiser can plan to replenish the goods and materials in the franchisee’s stores if it has come down to a minimum storage level. All this franchiser can do by monitoring the data of all the franchisee stores because all their data are stored in the central server or monitoring server administered by the franchiser.
The location of different franchisers in different region is aimed to cater the need of the customer by shipping to reach the goods and materials faster with minimum turn around time of 24 hours. The encouragement of buying online largely is because of the great ranges of choices and heavy discounts. No heavy operating cost involve on maintaining the outlets and retail establishments, make e-commerce a profitable proposition for the customers.
As the volume of sales grow, the e-commerce company benefits enormously by selling virtually online with operating and shipping stores at different locations. The mode of reaching goods to the customer remains on shipping by courier in minimum time.
The recent trend which allows the customer to fetch the materials directly from the physical stores at the same price makes huge savings on shipping and handling and in turn increases the profits of the online stores. In the bargain franchisee, franchiser and customer are in benefit.
Franchisers sees the greater sales volume, franchisee makes a cost savings by handling and shipping and customer gets the goods and materials faster without any hassles.
Think of a scenario, Mr. Murthy is a book lover and day after tomorrow happens to be his son’s birthday. As a gift, he wants to presents his son a full set of R K Narayan’s book which is available on www.flipkart.com at 30% discounts rate with payment on arrival. But the minimum shipping time required is 3 days and Mr.Murthy is not sure if he places the order it will be delivered to his son on his birthday. Ironically, the flikart store is located a kilometer away from Mr.Murthy’s house and eventually he passes the stores everyday while going to his office.
If the flipkart allows Mr.Murthy to pay and pick the books from the stores, he would be able to ensure that his son gets the birthday gift what he planned; in addition to that he makes a cost savings too. Therefore, the current model of adding physical stores location online and allowing customers to fetch goods and materials directly helps e-commerce grow their business at a faster rate and maximize their profits.
