Periodic Reporting for period 2 - SMILE (A smile in return)
Período documentado: 2019-06-01 hasta 2020-05-31
Product returns are an increasing problem in the European e-commerce market. Around 15% of all sold products are returned to the vendor. Most e-tailers have no solution for the fast-growing pile of returns they encounter in their warehouses. They have no other option than quickly amortize their goods and take a loss of up to 80% on their initial value. Not only monetary value is lost, but the environment is also affected by this extensive devaluation. 4 billion pounds of good quality products are disposed annually and the 11 million metric tons of carbon emission that was used for the production are spoiled. Although these numbers seem staggering, this is still the top of the iceberg. In the past 6 years, the e-commerce market has experienced rapid growth (14% annually) and there are no signs of slowing down.
BuyBay solves this problem by embracing returns and reselling them for a fair market value. With funding of the EU, BuyBay developed a data-driven solution that revolutionizes the intake, processing and resale of returned products. It uses highly innovative pricing software and is unique in its ability to connect inventory management and re-product grading to multiple third-party sales channels. BuyBay, hereby sets the standard for the reversed supply chain.
The different activities and results that BuyBay performed were integrated under an umbrella project: Project SMILE. The title of this project refers to the level to which BuyBay, with each re-product sold, makes a consumer happy, reduces waste, creates added value for our partners and leaves our world a little more sustainable. With the support of the H2020 grant we enabled growth in three areas:
First, a new and more efficient IT infrastructure was developed, that is capable of serving the entire European market. BuyBay improved its IT systems significantly to support the value chain in the best possible way. A new IT system was developed, launched and is continuously evolving into an even better system. This system ensures that all products are enriched with data and that all our stock is offered simultaneously on marketplaces through Europe and sold fully automatically. To make sure that our system is also scalable in Europe, we added the functionality to make sure that the software has the possibility to serve multiple warehouses.
Secondly, BuyBay improved its business intelligence methods, enrolled a new machine learning model and implemented a pricing strategy tool. New internal developed AI/machine learning pricing software now automatically retrieves the optimal price for the products on offer. With enabling multiple high-tech data features, it is guaranteed that BuyBay is the best solution for returned goods.
Lastly, a European roll-out was started. After a thorough analysis BuyBay decided to enter the German and French market. Since the beginning of Project SMILE, BuyBay created twelve partnerships with different companies in Germany and France. Resulting in an output of over 46.000 products sold in these countries after the fast roll-out.
The impact of project SMILE on BuyBay and its environment is gigantic. BuyBay became, with the support of the European Union, a profitable self-supporting business that is able to invest heavily in innovation. Partners get a higher pay-out for their products than ever before and BuyBay made a big socio-economic impact by reducing carbon emission and creating public awareness about the return product problem. These results were not left unnoticed and were acknowledged by many objective institutions who gave BuyBay multiple awards.
BuyBay solves this problem by embracing returns and reselling them for a fair market value. With funding of the EU, BuyBay developed a data-driven solution that revolutionizes the intake, processing and resale of returned products. It uses highly innovative pricing software and is unique in its ability to connect inventory management and re-product grading to multiple third-party sales channels. BuyBay, hereby sets the standard for the reversed supply chain.
The different activities and results that BuyBay performed were integrated under an umbrella project: Project SMILE. The title of this project refers to the level to which BuyBay, with each re-product sold, makes a consumer happy, reduces waste, creates added value for our partners and leaves our world a little more sustainable. With the support of the H2020 grant we enabled growth in three areas:
First, a new and more efficient IT infrastructure was developed, that is capable of serving the entire European market. BuyBay improved its IT systems significantly to support the value chain in the best possible way. A new IT system was developed, launched and is continuously evolving into an even better system. This system ensures that all products are enriched with data and that all our stock is offered simultaneously on marketplaces through Europe and sold fully automatically. To make sure that our system is also scalable in Europe, we added the functionality to make sure that the software has the possibility to serve multiple warehouses.
Secondly, BuyBay improved its business intelligence methods, enrolled a new machine learning model and implemented a pricing strategy tool. New internal developed AI/machine learning pricing software now automatically retrieves the optimal price for the products on offer. With enabling multiple high-tech data features, it is guaranteed that BuyBay is the best solution for returned goods.
Lastly, a European roll-out was started. After a thorough analysis BuyBay decided to enter the German and French market. Since the beginning of Project SMILE, BuyBay created twelve partnerships with different companies in Germany and France. Resulting in an output of over 46.000 products sold in these countries after the fast roll-out.
The impact of project SMILE on BuyBay and its environment is gigantic. BuyBay became, with the support of the European Union, a profitable self-supporting business that is able to invest heavily in innovation. Partners get a higher pay-out for their products than ever before and BuyBay made a big socio-economic impact by reducing carbon emission and creating public awareness about the return product problem. These results were not left unnoticed and were acknowledged by many objective institutions who gave BuyBay multiple awards.
Project SMILE started at June 1st 2018 with a total duration of 24 months. In total 24 deliverables were drawn up and after the first reporting period, All deliverables were successfully submitted.
The main achievements are:
- We built a whole new IT infrastructure around the BuyBay value chain with many BuyBay specific features. Two leading IT systems were developed and are live at this moment. These new systems have already led to many process efficiencies.
- The new Business Intelligence (BI) team created a metric dashboard that visualizes KPIs for all departments and enables partner SLA monitoring.
- We created AI/machine learning pricing software that calculates the optimal price of a returned product.
- Facilities were successfully set up in Germany and France. As a result, we can now do business in these countries. German/French partners are sending us their products and we sell them on German/French sales channels to German/French customers. This has already resulted in a generated revenue of €3.1M in Germany and €680k in France.
The main achievements are:
- We built a whole new IT infrastructure around the BuyBay value chain with many BuyBay specific features. Two leading IT systems were developed and are live at this moment. These new systems have already led to many process efficiencies.
- The new Business Intelligence (BI) team created a metric dashboard that visualizes KPIs for all departments and enables partner SLA monitoring.
- We created AI/machine learning pricing software that calculates the optimal price of a returned product.
- Facilities were successfully set up in Germany and France. As a result, we can now do business in these countries. German/French partners are sending us their products and we sell them on German/French sales channels to German/French customers. This has already resulted in a generated revenue of €3.1M in Germany and €680k in France.
Project SMILE started at June 1st 2018. Many ambitious goals were set and delivered for this project. The three most outstanding results for the sustainable BuyBay solution were the creation of a completely new IT infrastructure, achieving a high growth in recovery rates and running the operations in Germany and France.
First, the development of the new IT infrastructure is discussed. The unique value chain of BuyBay asks for a robust IT infrastructure that is capable of processing the incoming stream of returned products in an efficient and scalable way. However, at the start of project SMILE, BuyBay’s IT infrastructure was outdated and lacked processing capacity. Moreover, systems were isolated and there was no collaboration between them. Due to the expected growth of the company, the old system had to be replaced. The new IT infrastructure, that exists of the two systems FLUX and VAULT, increases the role of IT in the organisation. With the new Infrastructure, new data driven opportunities arise that lead to elimination of earlier process inefficiencies and improvement of product throughput volumes. With the new IT infrastructure, BuyBay meets European scalability demands and is ready for the future.
Second, the recovery rates are discussed. Due to the improvements of processes and operations, BuyBay experienced significant growth in the past reporting period regarding its recovery rates. Initially, in the first months of 2018, rates levelled at 56% and throughout the project an increase of almost 18% -to an average recovery of 74%- was established. BuyBay surpassed the initially set goal of 68.5% in 2020. This recovery increase resulted in a better profitability for our partners and higher volumes for BuyBay. The higher volumes helped to turn BuyBay in a profitable business, which means that we are now 100% self supporting.
Third, we introduced the BuyBay solution in Germany and France. We set-up facilities, connected German/French Sales channels, connected carriers and found partners. An impact is made in these countries and they already contribute to 11% of the total revenue. Our cost effectiveness analysis shows us that the financials in these countries work for our partners and for BuyBay.
As a result of the increasing scalability and recovery rates, BuyBay becomes more and more attractive for partners, customers and its own employees and therefore increases its socio-economical impact throughout Europe.
First, the development of the new IT infrastructure is discussed. The unique value chain of BuyBay asks for a robust IT infrastructure that is capable of processing the incoming stream of returned products in an efficient and scalable way. However, at the start of project SMILE, BuyBay’s IT infrastructure was outdated and lacked processing capacity. Moreover, systems were isolated and there was no collaboration between them. Due to the expected growth of the company, the old system had to be replaced. The new IT infrastructure, that exists of the two systems FLUX and VAULT, increases the role of IT in the organisation. With the new Infrastructure, new data driven opportunities arise that lead to elimination of earlier process inefficiencies and improvement of product throughput volumes. With the new IT infrastructure, BuyBay meets European scalability demands and is ready for the future.
Second, the recovery rates are discussed. Due to the improvements of processes and operations, BuyBay experienced significant growth in the past reporting period regarding its recovery rates. Initially, in the first months of 2018, rates levelled at 56% and throughout the project an increase of almost 18% -to an average recovery of 74%- was established. BuyBay surpassed the initially set goal of 68.5% in 2020. This recovery increase resulted in a better profitability for our partners and higher volumes for BuyBay. The higher volumes helped to turn BuyBay in a profitable business, which means that we are now 100% self supporting.
Third, we introduced the BuyBay solution in Germany and France. We set-up facilities, connected German/French Sales channels, connected carriers and found partners. An impact is made in these countries and they already contribute to 11% of the total revenue. Our cost effectiveness analysis shows us that the financials in these countries work for our partners and for BuyBay.
As a result of the increasing scalability and recovery rates, BuyBay becomes more and more attractive for partners, customers and its own employees and therefore increases its socio-economical impact throughout Europe.