Small medium enterprises represent the largest share of revenues in the apparel and fashion business, compared to larger integrated companies. Small companies however often have to rely on larger suppliers in order to efficiently produce their products. These larger suppliers however will often prioritize companies that place larger orders. In the impossibility to deliver larger orders, how can these buyers make sure that a producer complies with their requests? In this paper we try to answer this question by applying concepts from the marketing channels literature to the specific context of fashion buying. We conclude that despite that the peculiarities of the fashion business do not foster the formation of long-term commitment, dependent companies can develop sources of power based on knowledge and reputation, but also based on applying non-mediated ways to manage the buyer-seller relationship. Examples of possible power sources for a buyer are: establishing a strong brand that a business partner will use in promoting its proposition, forcing suppliers to make transaction specific investments (which are not redeploy able), specializing in new products and technologies that a supplier will want to understand and use, developing knowledge that can be exchanged in the form of specialized personnel, investing in standardization of communication before the relationship starts in order to reduce administrative costs for both parties. Power sources are most effective when non-mediated, i.e. informal and based on reciprocity; ‘hard’ contracts with punishments (coercive power sources) in case of non-compliance will diminish the willingness to collaborate.
Small medium enterprises represent the largest share of revenues in the apparel and fashion business, compared to larger integrated companies. Small companies however often have to rely on larger suppliers in order to efficiently produce their products. These larger suppliers however will often prioritize companies that place larger orders. In the impossibility to deliver larger orders, how can these buyers make sure that a producer complies with their requests? In this paper we try to answer this question by applying concepts from the marketing channels literature to the specific context of fashion buying. We conclude that despite that the peculiarities of the fashion business do not foster the formation of long-term commitment, dependent companies can develop sources of power based on knowledge and reputation, but also based on applying non-mediated ways to manage the buyer-seller relationship. Examples of possible power sources for a buyer are: establishing a strong brand that a business partner will use in promoting its proposition, forcing suppliers to make transaction specific investments (which are not redeploy able), specializing in new products and technologies that a supplier will want to understand and use, developing knowledge that can be exchanged in the form of specialized personnel, investing in standardization of communication before the relationship starts in order to reduce administrative costs for both parties. Power sources are most effective when non-mediated, i.e. informal and based on reciprocity; ‘hard’ contracts with punishments (coercive power sources) in case of non-compliance will diminish the willingness to collaborate.
In cross-border e-commerce, electronic retailers (e-retailers) aim to extend their sales activities via the Internet beyond national borders. Unlike large companies, small and medium-sized enterprises are struggling with their international online expansion. This phenomenon is not limited to countries with a developed e-commerce market; e-retailers from emerging e-commerce markets, too, face the problem. This study investigates what the drivers are of business performance of SMEs in cross-border e-retailing, and how drivers differ between developed and emerging e-commerce markets in Europe. Structural equation modelling analyses with the lavaan package in R on a sample of 453 owners and directors of SMEs from 20 countries, show that foreign market orientation not only directly influences business performance in cross-border e-commerce, but also indirectly through communication efforts in foreign markets. These results hold for both developed and emerging markets, however, there are two interesting differences. First in the influence of foreign market orientation and communication efforts on business performance, and second in the impact of the number of years the electronic e-retailer is active in cross-border e-commerce.
