Both win, retailers and consumers
Matti Koskelo, entrepreneur and managing director of Erätukku, is convinced that the American trend of transfer from traditional shops to electronic online shops will continue.
- Key prerequisites of development are advanced and efficient logistics and premium-quality products. Consumers are prepared to purchase goods over the Internet, but the products must be of top-notch quality without exception. Demands are even higher than for traditional shops.
Erätukku is an example of the vast opportunities eCommerce can offer.
Initially, the company began operating by selling products through its Web shop and, later on, through two factory outlets of its own. At times, growth figures have been three-digit.
- The development of our Web shop has been so rapid and our operations so profitable because fixed costs are always higher for traditional shops than for an online shop. Based on good systems and efficient logistics operations, our customers are ready for online transactions.
More affordable prices
Matti Koskelo says that customers are interested in online shopping not only because it is convenient and comfortable, but because prices are more affordable.
- In traditional shops, costs are incurred on many levels. We design our products domestically and have them manufactured where we can obtain the best quality at the lowest prices. If we market a product via retailers, the final price will include the margin for the brand owner, the wholesaler and the retailer, which can even double the price of the product.
- It is self-evident that consumers are prepared to go online to purchase the same quality at a considerably better price.
However, Mr Koskelo says that merely setting up an online shop and selling goods at affordable prices is not sufficient. Effective direct marketing and catalogues are essential support tools for eCommerce. Itella has delivery channels ready for delivering these, and good customer interfaces.
Another advantage of Itella is that it is able to grow alongside its customer.
Erätukku employs some 40 persons directly and another 60 indirectly. Its products are primarily designed in Finland, but produced by some 20 authorised contract manufacturers, mainly in the Far East. These products are sold to 13 countries.