'Unlimited Fashion' - an online platform

Adam Roberts was born in 1988 and raised in Perth, in a middle-class household. During his early childhood, his brother, Jacob Roberts, would hand down previously worn clothing; influenced by his brother's sense of style, Adam's driven passion for fashion began to establish. Being interested in fashion, Adam developed ideas that later would lead him to be a pioneer in the fashion industry. Adam knew that schools in the Perth Metropolitan Area were renowned for their special arts programs. Because of this, Adam enrolled at Rossmoyne Senior High School, where he developed his understanding of the arts and found meaning in fashion and design.

After a successful internship at a sports apparel printing Print Company, Adam decided to relocate and enrol at the University of Melbourne, majoring in supply chain management to earn the qualification he needed to start his own business. During his time at the University of Melbourne, Adam became friends with fellow students, including digital media specialist, Harvey Goods, and marketing and management major student Melissa Johnson. Being a self-driven individual and desiring finer things in life, Adam had a dream that one day he would be a facilitator for others with the same passion.

About the Company

Upon graduation, Adam started an e-commerce business, raised capital, and, with assistance from Harvey, launched the website and app known as 'Unlimited Fashion'. Unlimited Fashion is a company that specialises in the resale of rare clothing and shoe items. In the year 2012, starting at a small business level plan, Adam, Harvey and Melissa would purchase the new and rare items from major clothing brands (with clothing items now attracting customers that were willing to pay up to $5000 for 'limited' and 'rare release' items). With the help of Melissa's marketing expertise, the trio advertised their business. Interested in this sub-culture movement of reselling, Adam took it upon himself to investigate further and travelled out to Sydney. Arriving in Sydney to investigate the presence and influence of Supreme (https://www.streetwearofficial.com/collections/supreme), Adam quickly discovered cultural differences in Sydney fashion demand compared to his home city of Perth. The city of Sydney was one of a hustling nature when it came to business.

Adam was quickly able to identify certain problems with the community of resellers at a local level, and especially those individuals who were using Internet platform sites. The main issues concerning the products were 'legitimacy' and 'scamming', due to the highly competitive nature of reselling. This was due to having no physical proof to assure customers of the authenticity and genuine nature of the products and transactions.

As brands do not offer a support system for those individuals who participate in reselling, the transaction process was highly volatile, much like a black market. For those inexperienced in the way of online reselling or purchasing, it was a make-or-break situation. Experienced resellers would take advantage of inexperienced buyers and mislead them into purchasing 'authentic' gear which was, in fact, counterfeit.

While in Sydney, Adam observed the struggle of waiting in lines for product releases, which started at midnight and ran through to the afternoon of the following day. Customers were subjected to long waiting periods and limited stocks due to the restricted orders provided by the outlet suppliers.

A crucial discovery made by Adam when he found out that there were a limited amount of outlet stores in Australia, in the areas of Sydney and Melbourne, and an additional three international stores. Due to small and exclusive releases each season, those who missed out were more than willing to pay top dollar in resale. After Adam's research in Sydney came to an end, he was intrigued as to how he could improve the standards for the resale.

After returning to Perth, Adam held a business meeting with his partners and discussed his findings from the business trip. With this information, they were able to formulate plans and policies for their future business. They owned a warehouse in Perth for their day-to-day operations and storage of goods, as well as an online trading platform for resellers (all products within clothing and shoe wear) to showcase their goods. The warehouse operated at half of its capacity. To generate an income, they would charge resellers a percentage from completed sales and the customers a delivery fee for every purchase made.

Platform and Competitive Market

In the existing market and platform providers for the business that Adam Roberts invested in, there are other companies that co-exist at a larger operational scale. There are many major companies that lead the way in the e-commerce business.

Market Niche (Unlimited Fashion opportunity)

Based on the investigation and trip to Sydney, Adam and his business partners considered expanding the business to an international level. At the current business level, the company is operating strictly on Australian shores, producing a turnover amount of approximately 5 million dollars, generated from commission fees, reseller's subscription fees, and postage and delivery charges from customers (buyers). Although the company has thrived since its establishment and is financially stable, Adam and the business partners involved have begun discussing the possibility of expanding to operate overseas.

Problems/Challenges for Unlimited

Third-party service provider

Adam's business outsources its outbound logistic to a third-party provider. Using a third-party provider increases cost-effectiveness, with many substantial benefits. However, there are several issues that Unlimited face daily due to the inadequate selection of a logistic provider. Customers often complained that shipments were late, and when they did arrive, some customers refuse to accept them, as the items were damaged during transit. These mistakes reflect directly on the business, resulting in a loss of customers.

Inefficient inventory management

Unlimited started the business as an online clothing store, which then eventually expanded significantly as the business grew. Another problem in the current distribution model is its product storing method. Unlimited does not group their items by class or category. Instead, their items are stored wherever the items fit. This causes problems, as space in the warehouse has not been utilized effectively. Inefficient inventory management in the warehouse makes it difficult to find items in a timely manner, due to the difficulty of identifying a specific item's location.

Regulatory environment

Customers are becoming more aware of environmental wellbeing and ongoing disruption of social aspects, which has caused a strong demand for companies to conduct business through acceptable environmental standards. Unlimited received a trend of continuous negative comments over the design of packaging used. The complaints concerned the excessive usage of the materials, which did not comply with current environmental standards, including a lack of eco-friendly packaging and recyclable materials. The items are packaged excessively to avoid damages in deliveries; Unlimited often over-packaged their goods, putting a pre-boxed item in a second box with process inefficiencies.

Online payment security

One of the issues that have been hindering the business is the lack of security concerning transaction activities. When Unlimited first launched its, its main strategy was to minimize the cost of conducting the business, to attain a high turnover rate. This led Unlimited to integrate a low-cost online payment system. In the past, this 'low-cost' method has resulted in a significant amount of customer complaints about personal details being stolen, and funds being misused. This is reflected in the low rate of sales due to several negative reviews concerning payment security issues.

Glossary

Re-Seller: A re-seller is a company or any individual (usually referred to as a merchant) that purchases goods or services with the intention of selling them for added profit rather than consuming or using the acquired goods and services.

Customer: An individual who wants to purchase limited edition items through a reseller's platform.

Answer the following questions by considering efficiency and effectiveness in your suggestions for supply chain network.

Question 1: Draw a network diagram for Unlimited's current fashion supply chain?

Question 2: Discuss the challenges of expanding Unlimited Fashion business or supply chain overseas?

Question 3: (a) Describe the potential impact of inefficient inventory on Unlimited Fashion business?

(b) Discuss the way in which this inventory problem can be solved?

Question 4: (a) Outline or identify examples of the Australian standards for sustainability packaging?

(b) Develop a packaging strategy for Unlimited Fashion?

Question 5: Discuss efficiency vs effectiveness of online payment system for Unlimited Fashion?