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Making a business plan for e-commerce

Alan Kotok EXPERT RESPONSE FROM: Alan Kotok

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QUESTION POSED ON: 15 April 2002
My company is a textile and apparel industry. It's main activities are selling equipment and accessories to the local market. We want to make a business plan before going to e-commerce. Are their some steps to follow before going to e-commerce?


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Textile and apparels is an industry that has made a lot of progress in supply chain integration, and while it looks like your company makes equipment for the industry, you can expect your trading partners to be thinking in these terms. In developing a business plan for e-commerce (a wise move, by the way), you should consider first understanding the basic business processes in your industry, and evaluating the options against those processes.

For example, many textile manufacturers participate in vendor-managed inventory programs with their retailer customers, where they automatically replenish inventories to specified levels when items reach the re-order points. As a result, many manufacturers are making many smaller shipments, so the retailer has more inventory turns and lower inventory levels. You can probably expect the manufacturers to demand the same kind of relationships with their suppliers, so they can maintain a reasonable cash flow.

E-business helps support these commercial relationships since there needs to be more frequent and more accurate transactions between trading partners.




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