19 April 2011
ShipServ features in this month’s Maritime & IT Electronics with the focus on our latest “trust” features in ShipServ Pages. Also featured are our good friends at the International Marine Purchasing Association (IMPA).
The full publication can be found here, but the ShipServ article is reproduced below.
Engendering trust in electronic commerce
Trust is foremost in any business relationship, but demonstrating this quality electronically is difficult. ShipServ hopes its latest round of enhancements will let buyers and sellers decide for themselves.
By letting buyers review and rate sellers, ShipServ hopes to engender a greater degree of trust throughout its maritime e-commerce marketplace. Moreover, it has added a facility to let brand owners confirm the validity of companies purporting to be their approved resellers or agents. The overriding concept is to give the buyers and sellers using e-commerce service more influence in policing the virtual marketplace.
Trust always has been and always will be at the core of business relationships, whether online or offline. Arguably it becomes more prominent in the online environment, especially if a transaction is carried out without any prior face-to-face contact.
‘In the maritime market, buyers are reliant upon their suppliers,’ states Stephen Alexander, chief operating officer of the International Marine Purchasing Association (IMPA). ‘The complexity of modern ships together with the regulatory framework which envelopes them means that buyers must be able to rely on sellers fulfilling their part of the deal.’
Alexander recalls conversations when buyers have told him that price is sometimes a secondary consideration: ‘It is easy to conjure up images of buyers as hard-nosed negotiators constantly driving for the best price. But in shipping, price is not the be all and end all. Many buyers are often more concerned about quality and whether the delivery is made when the seller says it will.’
This makes sense: ship turn-around times are getting shorter and shorter. If a part does not arrive on time, it can severely impact on a vessel’s schedule. And once at sea, the ship has to be self-sufficient. There is no room for a replaced part to fail
within days of setting sail. How does this all relate back to e-commerce? ‘The issue is some buyers are wary of electronic transactions because they feel there’s a breakdown or disconnect in building relationships with sellers – often a critical element in engendering trust, especially in new partnerships,’ explains Alexander.
To date, IMPA has found that the companies who have gained the most from e-commerce solutions have been the ones that already had well-established business relationships. ‘It provides extra operational efficiency by removing much of the paperwork and day-to-day admin overheads. The important thing to remember is that ecommerce does not set out to replace traditional ways of trading. It is there as a tool to speed up and make the transactional element more efficient,’ says
ShipServ believes that the best way to establish trust online is to inform buyers with a combination of impartial data and peer-to-peer recommendations. This effectively puts the community itself in charge by enabling it to validate and verify
information in one of three ways:
– Actual transactions indicate which suppliers are most bought from;
– Customers rate and review their suppliers;
– Brand owners can verify their authorised agents.
All of these factors come together to define a supplier’s ‘TradeRank’, a measure of the supplier’s popularity in the industry. TradeRank has been available for the last 18 months or so and was originally based on a supplier’s trading activity
on ShipServ TradeNet, the ecommerce trading platform. ShipServ then looked to the best of the consumer internet – sites such as Amazon, eBay and Facebook – and decided that the industry should be able to indicate which suppliers are most appropriate, introducing ratings and reviews in late 2010. Positive feedback of this kind is now taken into account and can boost a supplier’s TradeRank.
New this year is the ability for brand owners to manage their authorised agents on ‘Pages’ – ShipServ’s Google-like spare parts search engine. This not only allows brand owners to set up all their agents on Pages but also means suppliers joining
the platform cannot claim authorised status unless approved by the brand owner. Verified suppliers will get a further boost to their TradeRank.
ShipServ is already working with some major component suppliers and OEMs who are eager to manage their reputations online by verifying which suppliers are their authorised agents. IMPA also stands to benefit from this functionality. ‘It
gives us the ability to verify who’s using our badge,’ says Alexander. ‘When buyers and sellers join an organisation like ours, they have certain expectations about the quality of other members. Buyers will trust suppliers who are IMPA members
and vice-versa. In this sense, our role is all about building trust. Therefore it is vital that we ensure there is no misrepresentation.’
In the past, IMPA has come across suppliers who use its logo on their letterheads etc without having any official affiliation with the organisation. ‘In some instances, members have informed us about illegitimate use. But policing such fraudulent
practices has always been a challenge,’ says Alexander. His enthusiasm for ShipServ’s brand management features is therefore quite understandable.
‘The ShipServ community comprises a network of thousands of businesses around the world,’ states founder and chief executive Paul Ostergaard. ‘With our suite of verification tools, it is this community who determines the best suppliers to do
business with – be that through authorisations, reviews or actual orders. It’s an incredibly powerful thing. It means buyers know they can trust the information being provided.’
With the community in charge of these three verification elements, Ostergaard is keen to stress ShipServ’s role as a neutral facilitator. ‘Allowing users to effectively ‘vote’ through their actions means ShipServ doesn’t decide who are the best suppliers and because of that, it is not itself influenced by buyers, agents or manufacturers.’
It is self-regulating mechanism. Buyers know that very active trading suppliers are effectively being trusted by the community with many repeat orders. ShipServ prompts buyers to review their suppliers and collects opinions so that other buyers can make decisions on where to buy. ShipServ publishes all the reviews it can, good and bad.
Poor performers get the incentive to improve, good performers can use the results in their marketing and buyers are able to make better choices. But ShipServ remains neutral throughout, making it the most transparent forum for marine procurement data available to marine buyers.
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