Guidelines for Building an E-commerce Product System

The establishment of an e-commerce product system is the key to ensuring the efficient operation of the platform, which involves the detailed planning of product information, structure and sales management. The construction of a product system is an important cornerstone for the success of e-commerce.

1. What are the design goals of the e-commerce product system?

If we do not involve derivative modules based on the commodity system such as price and activity, and only focus on the commodity system itself, through business modeling we can find that in the commodity system itself, the scope of management can be divided into three things:

1. Product information management
2. Product structure management: How to manage multiple products in a specific structure
3. Product sales management: region/channel/on and off shelves)

Next, let’s break down these three things in detail.

1. Product information management

Here we need to reasonably and efficiently implement a series of maintenance operations such as adding/modifying/deleting the basic information of the products we come into contact with in daily life, such as length, width, height, origin, alias, brand, barcode, etc.

Take a specific product, how would you describe the following product so that you can sell it online? Here’s a hint: This product is called a men’s T-shirt.

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In fact, to describe this product we need to compile such a table, as shown in the figure below.

You can see that a product consists of several descriptive items, and these descriptive items have a standard name in product management, which we call attribute management.

These attributes not only serve as descriptions, but also provide references for subsequent actions, such as purchasing, shipping and receiving. For example, you can define storage location attributes based on volume and gross weight, and place purchase orders based on unit conversion.

In addition to the above attributes, there is also a special attribute, which we call the product status, which is the status that identifies the product life cycle. Generally speaking, the product life cycle can be divided into: introduction, trial sales, distribution, operation, replacement, and clearance. Each status will have additional corresponding attributes.

Therefore, it can be said that in the process of product information management, all we need to do is complete two actions:

1. Sort out the commodity attributes required by upstream and downstream (warehousing, logistics, etc.);
2. Organize and define the roles and processes for adding, deleting, modifying and checking product attributes (for example, where are the attributes used in warehousing maintained? Who maintains them?)

2. Product structure management

After managing a single item, when we introduce multiple items at the same time, such as more than 3,000 SKUs in a convenience store or 1,600+ SKUs in a certain brand’s online store, how to use a specific structure to help users find the items better under multiple items is the management of the item structure.

Here, product structure management can be divided into two parts: horizontal management and vertical management.

1. Vertical management: that is, listing products in a tree structure, which is the common category tree.
2. Horizontal management: As the category tree continues to grow, the category has become a new huge information library. It becomes very complicated to find a subcategory. Therefore, we will add a horizontal brand library to the category tree for connection. For example, under home appliances-TV, there will be brands such as Huawei, Xiaomi, TCL, etc. for quick screening.

3. Product sales management

After completing the product management, the next step is to manage the sales of the product, that is, whether the product is available for sale. In daily product operations, we often encounter the following types of needs:

1. A supplier's products are only sold in a certain area and are not sold across regions, otherwise the cost of the product will be too high due to transportation costs, etc.
2. A certain product is only sold on a certain online channel and not sold offline, thus separating online products from offline products and making it easier for manufacturers to set prices (offline prices are higher);
3. A certain product goes on sale at 12:00 today, but will only be on sale for 5 hours, ending at 17:00.

Therefore, what we need to manage in this stage are various sales strategies.

2. Functional composition of the commodity system landing system

After sorting out the three major problems that the product system needs to solve, let’s take a closer look at what system should be used to solve these problems?

In response to the above three problems, the system functions of the product system we built are as follows:

1. Product classification: classification tree management, generally including three to four levels of classification. In particular, the category tree generally includes two categories, namely the front-end category and the back-end category:

1. Front-end categories: used for operational purposes. The classification rules are not based on the standard commodity category principles, but on marketing needs. Marketing categories such as summer must-have items often appear.
2. Backend categories: used in the supply chain, especially in procurement, where goods need to be classified according to certain standards to ensure the accuracy of classification.

2. Product brand: Aggregate products by product brand and horizontally manage product brands under different categories. Specifically, multiple categories and products will be bound under one brand. For example, Xiaomi brand:

1. Home appliances-TV category;
2. Communication-Mobile phone category: sku=Xiaomi 12-Black-128g;
3. Computer-Laptop Category

There are corresponding product SKUs in different categories.

3. Product attributes: used to manage the basic information of products, usually grouped according to the classification of attributes;

In addition, in attribute construction, attributes must be associated with categories. When creating a new product, the first step is to select a category. Then, when creating a product based on the selected category, the system queries the corresponding attributes bound to the selected category (for example, under the mobile phone category, attributes such as clothing size will not be displayed).

The so-called attribute library in many e-commerce companies is to automatically query the attribute fields under a category when creating a product and selecting the category.

4. SPU-SKU system: The smallest inventory unit of each product is defined as a SKU. Based on the SKU, different models are aggregated into an SPU to achieve aggregate management of products.

5. On-shelf and off-shelf management

Manage the sales status of different products. In the front-end, the products that are on the shelves and have available inventory are generally displayed as available for sale. At this time, users can place orders in the front-end. The common functional points in listing and unlisting are:

1. Manual loading and unloading
2. Batch delisting
3. Automatically put on and off shelves (automatically trigger putting on and off shelves according to time, inventory and other conditions)

6. Distribution management: Products are promoted one by one according to the business areas where the company operates, for example, selling from South China first and then to East China.

7. Channel management: Different sales areas based on operational needs are called channels. Generally, there are online channels (JD.com, Taobao, etc.) and offline channels (direct sales, dealers, distributors, agents, etc.). At this time, you can bind the channel when creating a product, thereby specifying that the product is only sold in a certain channel.