[3537]

Franchising network automated for peanuts

Date:
August, 2013
Prototype:
proto$ gen VI mod 3FFECA (Londinium)
Customer:
LAF24.ru
A franchising network is an automated using franchisee' web interface, which is quick, reliable, inexpensive and extremely fool-proof.

LAF24.ru is a retail subdivision of one of the largest auto parts distributors in the CIS market.
The project was launched as a start-up in 2012. It’s an Internet supermarket that supports online orders and offers three ways you can get your order: it can be picked up from a central wholesale warehouse, delivered to you, or you can pick it up at a drop-off site. Quite a standard procedure, as you can see.

Well, except for pick-ups at a drop-off site. Building up your own chain could turn out quite costly. Regular operating expenses alone could, as an order of magnitude estimate, total up to $10,000 per outlet monthly. And that’s exclusive of your initial investment needed to open it up.

It’s clear that consenting to make a sizable investment into a full-scale chain (with you needing quite a number of outlets straightaway, or else you aren’t really getting a real chain) plus agreeing to deal on a regular basis with a pile of issues in running your outlets, which you know are not going to make you money for at least a few months, is quite a tough decision to make. Any start-up is a highly risky idea by definition, and doing it that way will only augment your risks.
Be as it may, having a chain of pick-up outlets in place has been recognized by the company to be critical to the success of the project as a whole.

Of additional interest in this situation is the product range. Compared with the overwhelming majority of (if not all) products traded online in said format, auto parts are 100% NOT an impulse demand product. Well, perhaps except for the gaudy stuff some car-tuning buffs just love to slap on their domestically made buckets of a car. But you won’t really make much money off these guys.

In reality, it’s highly unlikely that most car owners will want to buy a new bumper or, say, a new side window just because they feel like it, or have taken a fancy to it, or there’s a "new model" out. While that seems to be a rule of thumb when it comes to cell-phones, clothing, or perfume. Demand-wise, auto parts are rather a product intended for professional consumption. It’s for this reason that, when it comes to auto parts, putting together a retail chain does not really align with the classic assertion (which works perfectly for consumer goods) that in retail there are three things that matter the most – location, location, and location.  When you sell products that, in essence, aren’t consumer goods, it just doesn’t make sense to run around and pay through the nose for high-traffic spots — that won’t avail you much, considering your product range.

So our buddies from LAF24.ru did this to resolve the problem: your pick-up outlets are set up on the premises of certain existing facilities known to attract target consumers, places whose line of business fits in contextually with the sale of auto parts. A classic example here is an auto service center.

Setting up a pick-up outlet requires no investment on the part of LAF24.ru: an operating auto service center enters into an agency agreement which provides for payment of commissions on sales, then the agent’s staff members undergo a 30-minute training session, and you’re done. That’s all there is to it.

The agent’s personnel use dia$par, common to the entire LAF24.ru chain, through a special Web interface. On one hand, it’s a most facile interface with every conceivable poka-yoke in place, and on the other it is quite full-featured and integrates all business processes for the agent’s spot — from receiving the funds to processing orders that haven’t been picked up.

A Retail Outlet’s Main PageGoods Acceptance via the Retail Outlet’s Web InterfaceFunctionality for Handout of Orders at a Retail Outlet

All transactions that take place at agent outlets are reflected in a dia$par in (of course) online mode. There are no "uploads" or "synchronizations". Authorized system users get to keep track of every little detail across the outlets, like the amounts of merchandise and cash, transactions, goods in transit — you name it. So, it took LAF24.ru just 2 months and cost almost nothing to open as many as 8 pick-up outlets, and there are plans to make that 50 before the end of the year.

Being inside dia$par. Some stories
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