Summary - The Waterfall Approach

An opportunity exists to rapidly and efficiently move returns inventory out the door quickly, while maximizing the returns for truckload, pallet and individual SKU.

By leveraging branded storefront sites, auction sites and third party auction and fixed price marketplaces – from one console – it is now possible to ensure the best possible prices for truckload, pallet and individual SKU.

The centralized online management of the inventory allows logistics managers to easily shift inventory from one venue to another (e.g. branded B2C auction site to Amazon)

Things to Ponder:

a) Focus on what combination of product you wish to offload: truckload, pallet, individual SKU
b) Choose your product flow.

Example of AUTOMATED product flow from:

  1. Branded B2C storefront for individual SKU, with unsold moved to
  2. Branded B2C auctions for individual SKU, with unsold moved to
  3. Branded B2B storefront auctions for truckload and pallet, with unsold moved to
  4. Branded B2B auctions for truckload and pallet, with unsold moved to
  5. Amazon and/or eBay Marketplaces.

The Dell Experience – Clearing returns and maximizing revenue

Dell was interested in improving the process by which it cleared out returned product. While relatively easy to sell returns inventory in bulk to jobbers, Dell wanted to maximize pallet and individual SKU revenues. As a result they have created the Waterfall approach to clearing out inventory and maximizing revenue.

The Waterfall Approach:

The Approach can start with Truckload/Pallets or individual SKU’s – Dell chose to begin with individual SKU’s. All individual SKU’s are automatically loaded by the Dell merchandiser to the Dell branded fixed price B2C store located at www.dellrefurbished.com. Any unsold items from the B2C Storefront are automatically shifted by the merchandiser to the Dell branded B2C auction site located at www.dellauction.com .
Dell Merchandisers are then able to sell the remaining product either:

a. Bundled as Pallets that are then sold online using a Dell branded, B2B auction site (this is currently a manual process – shifting online in 2017).

And/or

b. Distributed by the Dell merchandiser to third party marketplaces: Amazon and eBay.

Again all from one console.

This Waterfall approach is designed built and managed by Commerce Dynamics in partnership with Snow Commerce for Dell to ensure higher per revenue per item or pallet and swift progress of inventory out the door.
Commerce Dynamics in partnership with Snow Commerce offers a fully functioning program that includes all of the online solutions to maximize returns and flow-through. These include: enterprise-level branded storefront for B2B and auctions for B2B; enterprise-level branded storefront for B2C and auctions for B2C; integration with Amazon and eBay: and the administrative interface to shift unsold inventory from one venue to another… to another. As mentioned above, this is the Returns Waterfall Approach.

The Waterfall Approach requires certain enterprise-level elements for success. Those include Branding, Usability, Security, Infrastructure, Moneyflow, Inventory management and Fulfillment.
Branding

The Waterfall is initiated with branded auctions. These are now occurring on desktop, tablets, mobile devices, apps, and at-event; users are communicated to using email, SMS, app notifications, social channels, and video. It is essential that the technology be able to create a unified branding experience in every medium and channel. The technology exists for unique branded elements to be available for the entire site (e.g. Dell auctions) and/or at the Seller level. In either case, branding is a serious issue.

Usability and Personalization

By far the strongest of the Waterfall approach is the simplicity of the user experience. Things like one-click-bidding and an easy intuitive registration process are necessities. For example, progressive bidding does not require users to immediately register with full profile information (including a credit card), the system gradually extracts more information from potential bidders as their time spent on site and bidding activity grows.
Another example of simplifying the user experience is Single Sign-On (“SSO”). If an already existing user on the parent site visits the branded auction site for the first time, they do NOT want to have to re-register.

The Enterprise Level Auction technology must have the ability to accept user login credentials from the parent site and send back specific information to the parent site using API’s. This is referred to as Single Sign On (SSO). It can also be used to create a more personalized experience (Welcome back Michael…”).

The Waterfall approach has some ability to personalize the site content itself. For instance, the front page for a returning bidder can contain the specific item(s) they have bid on. In other words, the platform tailors the front page to the specific user.

Security

This is by far the least discussed and most important element to a the Waterfall Approach. It is essential that the entirety of the user experience be Payment Card Industry (PCI) Level One compliant. VISA, MasterCard, and AMEX created and maintain the auditing processes that encompass PCI compliance.

Enterprise Auction sites capture credit cards and, therefore, must undergo a yearly PCI audit. Passing the audit means that the credit card companies themselves believe that the technology, and bidders credit card information, is as secure as it can be. Unfortunately, many technologies have PCI acceptance, which is not true compliance.

Infrastructure (scalability & flexibility)

Everyone has experienced sites that are “down”. This is often due to infrastructure issues.
The Waterfall Approach must take into consideration two things:

  • Bandwidth issues: Unlike standard eCommerce sites, branded auction sites (due to the nature of the business) will experience surges in traffic. When this surge occurs, it is essential that the site is scalable and is able to manage the additional visits/bids/etc., without slowing down the user experience of the site. For this reason, the best technology is always hosted with a large third party hosting and infrastructure provider, such as Amazon Web Services (AWS). Providers like AWS support the ability to immediately and quickly scale should surges in traffic occur.
  • Infrastructure issues: regular growth in user traffic requires a technological setup that can easily and simply grow. From an infrastructure standpoint, this means adding additional servers and firewalls in a matter of hours – not weeks. AWS and others cloud infrastructures can facilitate this.

Money Flow (i.e. Payment Gateway and Merchant Accounts)

Each element of the Waterfall Approach has different money flows.

a) Branded Auction Sites
- MONEY FLOW: By setting up your own payment gateway and merchant account, all funds will flow into that account from all sales on the Auction site.

b) Leverage a third party, existing Marketplace such as Amazon, eBay etc.
- MONEY FLOW: Third party auction marketplaces have their own distinct methods of handling money flow and processing. Some process funds for Sellers and some require separate merchant accounts.

Inventory Management & Fulfillment

What happens AFTER a purchase is also exceptionally important. The technology behind the Waterfall Approach must be proven to ensure a smooth after-purchase experience for the buyer – these can include real time reports, refund and returns processes, delivery tracking mechanisms, etc.

Contact us at info@commercedynamics.com to discuss maximizing returns and clearing inventory.