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EBAG management growth case examines a set of expansion options for a positive progressing internet luggage retailer, with a specific emphasis on the operational difficulties. EBags’ business model offers a diverse collection of products in a single online retail location. Their website made it possible for consumers to search for goods without spending time and money on traveling to different stores and locations. EBags’ online storefront minimized their supply chain and, therefore, provided a chance for important cost-savings. Two varieties of processes were introduced into the business model: drop –ship satisfaction and also private label supply chain. In the drop-ship model, inventory was sorted out at the producers or distributor level. EBags was acting as an intermediary for the customer. The customer ordered on the website, and eBags electronically transmitted the order to the vendor. The vendor, in turn, shipped orders directly from producers to consumers. eBags.com domain lent more opportunity to expand into several categories. It has helped the company encounter rapid growth and can be attributed to three strategies: a drop ship model, customer reviews and outsourced call Centre. It has reduced the inventory risk. The company also drop-ships products, but part of the business has shifted to an inventory model which has permitted them to work with a broader choice of brands.
The issue, as eBags revealed and as many online vendors have yet to understand, outlines the fundamental operational difficulties of Internet retailing. It centers on a concept general in the business-to-business idea but hardly employed in a business-to-consumer context: cost-to-serve. Presented as the total supply chain cost to destination from origin, cost-to-serve incorporates factors of the like as inventory stocking,