Understanding the Structure of E-Commerce Products

Introduction

Do you have a lot of doubts when you are new to the field of e-commerce? Do you feel unable to start e-commerce products? This article introduces the structure of e-commerce products in detail, and it is recommended for beginners who want to understand the structure of e-commerce products.

After reading this article, you will understand the following:

  • What is a complete e-commerce business?
  • What systems are behind the e-commerce business?
  • How are the e-commerce system modules connected in series?
  • How to design the product architecture of the e-commerce system?

Most product managers who are new to the e-commerce field will more or less realize that the e-commerce system has many modules, long processes, and complex logic. In the e-commerce system, in addition to the front-end APP and website that can be seen and touched, there are more invisible underlying logic and back-end systems.

For most students, it is troublesome to find competitive products of similar back-end systems for research and reference. Therefore, for a long time, there has been an illusion that the threshold of e-commerce products is higher than that of products in other industries.

Although e-commerce products are complex, it has a very important feature, that is, e-commerce products are typical business driven products. Business driven products, all of whose features serve an entity business. Therefore, if you want to find out what feature modules the e-commerce products have, you can start with the e-commerce business, first understand what links a complete e-commerce business has, and then analyze what features are needed to support based on each link. After exhausting all features, you can summarize them according to a certain logic to get a glimpse of the whole images of the e-commerce products.

This article will start from three parts: the business process of e-commerce, the system process of e-commerce, and the system architecture of e-commerce, and show the world of e-commerce in simple terms through three images.

1. Core business of e-commerce - procurement, sales, warehousing and distribution.

Since the development of e-commerce, various names have appeared, including, B2B, B2C, social e-commerce, and so on. No matter how diverse the form of e-commerce is, its essence is the process of buyers and sellers fulfilling contracts around commodity transactions.

Before starting the discussion, let's delineate the direction of the discussion. This article mainly focuses on direct sales e-commerce platform. Because the core of platform-based e-commerce is actually a traffic business, the responsibility of the system is more to match a large number of commodities with consumers, and the platform charges transaction commissions and advertising fees from merchants.

In addition to the ability of platform e-commerce, the direct sales e-commerce platform business model also involves physical links such as procurement, warehousing and distribution. Its system modules are more, longer and more complex, and can basically cover the core system modules of platform e-commerce. Therefore, taking direct sales e-commerce platform as the main discussion direction, we can understand more comprehensively. Others, such as B2B, B2C and social e-commerce, are just different in fields or manifestations and do not belong to the same dimension.

So what does a complete direct sales e-commerce platform business look like? What steps does it take to deliver a product to consumers?

Complete e-commerce business process (Click the image to open it in a new window)

It can be seen from the above business scenario diagram that there are many links that a product needs to go through to sell to consumers, including offline entity links and online system links. After further abstraction according to the offline entity links, the direct sale and platform e-commerce business can be Divided into the following 4 parts, respectively.

 

  1. procure products from suppliers
  2. Warehousing and inventory management of purchased products
  3. products are put on sale
  4. Fulfillment delivery based on sales order

The business process diagram is shown as follows.

(Click the image to open it in a new window)

After understanding the business process, it is easier to sort out the systems behind these business links based on the business process. All systems and features in e-commerce business are generated and evolved based on the above business processes.

2. E-commerce · whole process of system

Based on the above business process, we combine the business process with the required systems or features to see what systems or features each business link has. At the same time, we divide the whole system process according to the business boundaries of procurement, sales, warehousing and distribution, and then combined with the C-end purchase process, we can get a complete flow chart of large-scale e-commerce system, as follows.

(Click the image to open it in a new window)

The above image is the flow logic of a complex e-commerce business in the system, from the supplier / merchant settlement platform to the procurement of products, receipt and warehousing, sales, and then delivery and order fulfilling. Through this image, you can clearly see the systems or features corresponding to each business link. In order to facilitate beginners' understanding, it is necessary to explain some nodes in the flow chart (which can be read in combination with the flow chart).

1. Merchant & supplier registration and procurement process

  1. Registration: Including the entry of suppliers and the entry of sellers. The entry action mainly includes selecting the type of the settled enterprise, submitting the corresponding materials (business license, qualification, etc.) based on the type, signing the contract, and after the platform has passed the approval, then got enterprise account wallet.
  2. Opening a store: For merchants, you can create a store after successfully registration. Opening a store is mainly to select the main category according to the business scope of the business license, fill in the basic information of the store, and pay the security deposit.
  3. After the supplier registration, the direct sales purchaser place a procurement order in the procurement system, and the order is pushed to the supplier through EDI or offline.
  4. Supplier delivery. After the supplier receives the procurement order, it will deliver the products according to the information in the procurement order (products, receiving warehouse, etc.), and the inventory in transit will be generated after delivery.
  5. Inventory. Whether it is in-transit inventory, physical inventory generated after physical storage, and front-end sellable inventory, all are controlled by the inventory center.

2. Sales process

  1. Release items. That is, creating a product SKU, including filling in the product parameters, product details and other information, the merchants will directly set the price, and the direct sales products varies according to the category.
  2. Pricing. When a product is released, the sales price will be determined through the pricing system. The sales price and a series of prices such as procurement price, inventory cost price, and promotional price form a complex price model, and are recorded together in the price center to form a complete price system.
  3. On sale. After the product is released and priced, you can control the product's on & off sales.
  4. Promotion. That is to do promotional activities through promotion tools, including single category type, total price type, coupons, etc., all promotion rules are controlled by the promotion center, including promotion activity admittance rules, unison & exclusion rules between different activities, and promotion hit rules , discount calculation, promotion risk control, etc.

 Build a special event page. Promotional products are sometimes displayed on special event pages (Discount area, gift area, etc.). Through the CMS system, you can build a special page of any style by dragging and dropping components anytime, anywhere, without code development.

3. Golden Process

Refers to the pages experienced when purchasing products from the user's perspective, including search - product list - product details - shopping cart - order pages, also known as the main transaction process or transaction flow in many companies;

The golden process is the main embodiment of price and promotion. Therefore, in the golden process, the design of price and promotion is particularly important, including the highlighting of promotion prices, the design of promotion signs, the grouping of shopping carts, etc., which have a direct impact on the transformation.

Generating an order: Generating an order is a very complicated process in the backend, including checking inventory, price, user information, promotion information, etc. The order is created and generated by the order center.

Reserve inventory: When an order is generated, it will interact with the inventory center to reserve inventory.

Cashier: order generation and payment are two independent links. The common payment methods are online payment and cash on delivery. Some businesses (B2B) will set the payment method of bank transfer. The latter two payment methods are completed offline. For online payment orders, a variety of payment methods can be aggregated to the settlement page, including free payment, online banking payment and three party payment (Apple payment, Alipay payment, Google payment, etc.).

Payment reconciliation. For the order of payment before delivery, various payment methods have payment limit, and the method of bank transfer can not guarantee that the user will pay according to the actual order. Therefore, the actual payment amount may not be equal to the order receivable amount, so the account reconciliation needs to be completed through the reconciliation system.

4. Order Sourcing & Fulfillment Center

The system between the transaction process and the warehousing process - the responsibility of the order sourcing & fulfillment system is to distribute thousands of orders generated by the e-commerce system to the most suitable warehouse for production on time. The order fulfillment center consists of multiple subsystems or services, including splitting system, allocation calculation service, transfer system, fulfillment control center, etc.

Order splitting: After the reconciliation is successful, the order will enter the first system of the sourcing & fulfillment center - splitting system. The split scenarios mainly include: production dimension (different warehouses, different merchants, different delivery methods...), business type dimension (physical orders, virtual orders, fresh orders...), etc.

The responsibility of the system is to split the parent order into multiple sub orders for production according to different rules. When splitting, the allocation calculation service will be called to calculate the amount of each new sub order.

Order downward transfer. After splitting, transferring and fulfilling control, the order will be delivered to the corresponding warehouse for production on time.

The above is the introduction of the whole process of e-commerce. Each process node in the whole process is an independent and huge system. This article only introduces the flow relationship and basic responsibilities between each system. The detailed feature design will be expanded in the subsequent series. 

3. Large-scale e-commerce product structure

We get the system process through the e-commerce business process. With the system process, we get the basic feature modules of the e-commerce system. Based on the basic feature modules sorted out above, we expand and split them more finely from the overall perspective of the system, and organize the finally split feature modules according to the logic of the structure diagram to get the product structure diagram.

(Click the image to open it in a new window)

The organizational logic of this structure diagram is relatively simple (can be viewed in combination with the E-commerce · whole process of system chart).

From top to bottom, they are: Client System > Operation System > Contract Fulfillment System > Production System > Basic Platform > BI System.

Client system: mainly responsible for the needs of users to purchase products. The core system includes registration / login, golden process and personal center; The client system belongs to the frond-end system, which pays more attention to user experience and data analysis in product design.

Operation system: It mainly carries the ability of internal operation. The core system includes user management, products management, price management and marketing management.

Transaction fulfillment system: The transaction fulfillment system is a central system that carries order transactions upward and controls production fulfillment downward. The core system includes an order center and a sourcing & fulfillment center, which belong to the black box part of the e-commerce system, with fewer UI interfaces and more underlying logic.

Supply chain and production system: supply chain system is the purchase, sales and inventory system, which is collectively referred to as ERP in many enterprises. It is mainly responsible for product procurement, inventory management, warehouse management (WMS) and transportation management (TMS).

Basic platform: The basic platform is a system other than the business system, mainly including employee account management, master data, financial system, business management system, service market and open API platform.

BI system: parallel to other systems of e-commerce, collect data generated by each system, feed back to other systems after processing, and provide various data analysis capabilities.

If the e-commerce system is compared to a large supermarket.

  • The client system is the visible supermarket itself, the homepage is the entrance of the supermarket, the search is the shopping guide, the list is the shelf, the shopping cart is the shopping cart, and the settlement is the cash register. The client system is responsible for carrying the purchasing and ordering needs of consumers;
  • The operation system is the promoting and shopping guide of the supermarket, who is responsible for guiding consumers to shop, setting product prices, and releasing promotional activities. The CMS system is the DM. The operation system supports the sales demand of various channels and terminals upward and connects the order system and transaction fulfillment system downward;
  • The supply chain and production system are the behind-the-scenes workers in the supermarket, including buyers, warehouse managers, and delivery staff.

4. Summary

  • A complete direct sales and platform e-commerce system has 4 core sectors: procurement, sales, warehousing, and distribution;
  • Based on the characteristics that all e-commerce products serve the entity business, the system or feature required for each link can be sorted out according to the business process, and a complete system flowchart can be obtained by connecting these features in series according to the business process;
  • Divide the system functions into as fine granularity as possible, and then according to a certain organizational logic, we can get the final architecture diagram.

As mentioned above, each of the above modules is an independent and huge system. In a mature e-commerce company, each system often has one or more product managers who are specially responsible for the design, iteration and optimization of the system.

This article mainly introduces the basic feature modules of the e-commerce system and the responsibilities of each module. It shows the panorama of e-commerce through three big images. These three images are a summary of the e-commerce business and system. This article is not a specific design scheme, but just to give beginners a preliminary understanding of e-commerce. As for more specific design ideas and schemes, they will be developed in subsequent articles.

So far, the design of e-commerce has become a relatively mature field. Many e-commerce systems and features design can be found online, which may only be different in industry, business volume or direction. It is suggested that when designing the core system of e-commerce, beginners should not blindly design based on subjective feelings, and should deeply investigate the existing mature schemes to avoid tripping on the pit.

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