Lesson 3.1 named e-commerce as a channel, not a selling model of its own: wholesale, private label and own-brand businesses can all sell partly or fully through e-commerce. This lesson stays inside that one channel and asks what actually changes for a merchandiser once some of an order is sold online instead of, or alongside, a physical shop. A buyer who orders the same size ratio and plans the same returns process for both channels, on the assumption that "it's the same product," usually finds the warehouse overwhelmed with e-commerce returns and the wrong sizes running out first. This lesson mainly teaches a decision flow: what to check, order by order, once more than one channel is in play.
You need: lesson 3.1's idea that e-commerce is a channel, and the general shape of Order A (Course 1).
By the end of this lesson you can:
Not covered here: how to calculate an accurate size ratio for a channel (a later course's topic), and the full decision of whether to change a business's selling model at all (lesson 3.5).
| Term | Meaning |
|---|---|
| Channel | A route through which a business sells to its final customer: a physical shop, a website, or a marketplace. |
| E-commerce | Selling a product to the final customer through a website or app, instead of, or alongside, a physical shop. |
| Size ratio | The split of an order's total quantity across the sizes offered, for example 1:2:2:1 for S:M:L:XL. |
| Return rate | The share of pieces sold that customers send back, usually shown as a percentage. |
| Split channel stock | Holding separate stock for e-commerce and for physical shops, rather than one shared pool both channels sell from. |
| GSM | Grams per square metre: the standard way fabric weight is stated. A customer who cannot touch the fabric cannot judge its GSM from a photograph alone. |
Lesson 3.1 placed e-commerce alongside physical shops as a route to the final customer, available to a wholesale, private-label or own-brand business alike. That does not make it a neutral change. The one fact that matters is that an e-commerce customer cannot touch or try on the product before buying, while a physical-shop customer can. Everything this lesson teaches follows from that single difference.
| What can differ | The shapes you will meet | Why it matters to you |
|---|---|---|
| Size ratio | A physical-shop customer who is unsure of a size can try one up or down and swap on the spot. An e-commerce customer usually orders from a size chart alone, without trying it on, which leads to more size-driven returns. Some brands respond by ordering a different size ratio for e-commerce-heavy channels, weighted toward the "safe" middle sizes. | Ordering the same ratio for both channels regardless of how each one actually sells leaves the wrong sizes short in one channel and left over in the other. |
| Returns handling | A physical shop mostly exchanges or refunds on the spot, off the stock already on its own shelves. An e-commerce return usually travels back through a warehouse, waits for re-inspection, and only then becomes stock the brand can sell again. | The e-commerce channel's returned stock takes longer to turn back into a sellable piece, so it needs its own resourcing, not the shop's spare capacity. |
| Product information as a substitute for touch | E-commerce depends much more heavily on accurate measurements, fabric descriptions and photography, since the customer cannot feel the fabric's weight (its GSM) or see its true colour on a screen the way they would in a shop. | Thin or inaccurate product information does the job a physical shop assistant and a fitting room would otherwise do, so gaps there show up directly as returns. |
| Split channel stock | Many brands, including a hybrid business running both channels, hold separate stock pools for e-commerce and physical shops. Others share one pool with real-time visibility of what is available where. | Each choice carries its own cost and complexity trade-off; this lesson does not go further into it than naming the choice. |
Cedar & Co., the local, domestic brand with 12 shops, makes to its own forecast (Make to Stock) and is best known in this curriculum as a single-channel, physical-shop business. In practice, a business like Cedar & Co. commonly adds an e-commerce site alongside its physical shops, selling the same T-shirt through both at once. Running more than one selling channel side by side, with its own stock pool for each, is what makes this version of Cedar & Co.'s business a hybrid case for this course: not two separate businesses, but one business operating two channels together, each with its own ordering and returns pattern.
Contrast this with Northline Apparel, the export brand from Course 1, which sells Order A's T-shirts only through its own physical shops abroad. Northline Apparel gives a single-channel comparison point: one set of shops, one size ratio, one returns process. Cedar & Co.'s hybrid, domestic case is the one this lesson follows in detail, because it is the case where the e-commerce/physical channel question actually has two channels to compare.
| Company | Channels | Business model |
|---|---|---|
| Northline Apparel | Its own physical shops abroad, only | Single channel |
| Cedar & Co. | 12 physical shops and one e-commerce site | Hybrid (two channels at once) |
This is a simple, clearly labelled illustrative example, not a claimed fact about Cedar & Co.'s or Northline Apparel's actual figures. Take an order the size of Order A, 15,000 pieces, and suppose it split 9,000 pieces sold through physical shops and 6,000 pieces sold through e-commerce. If e-commerce returns ran at 20% and physical-shop returns ran at 8% for the same T-shirt, the two channels' returned-piece counts would be:
Even though the e-commerce channel sold fewer pieces than the physical-shop channel, it would send back more of them for re-inspection. The returns-handling workload does not scale with the channel's size; it scales with the channel's return rate.
A common mistake is treating a T-shirt sold through two channels as needing the exact same size ratio and the exact same returns process in both, on the reasoning that it is the same physical product. The product is the same; the buying experience is not. An e-commerce customer cannot try the product on or touch the fabric before paying for it, and that difference usually shows up as a real behavioural difference, most often a higher return rate. Ignoring it can leave a warehouse that was resourced for physical-shop volumes overwhelmed with e-commerce returns it cannot re-inspect quickly enough, which then delays the stock coming back onto the site as sellable again.
E-commerce is not a separate way of selling; it is one more channel, alongside physical shops, that a wholesale, private-label or own-brand business can use. What changes is practical, not structural: an e-commerce customer buys from a size chart and a photograph instead of trying the product on, so e-commerce orders often need a different size ratio, e-commerce returns usually travel through a warehouse instead of being exchanged on the spot, and e-commerce product descriptions have to do the work a fitting room and a shop assistant would otherwise do. A business running both channels at once, like a hybrid version of Cedar & Co., has to plan for both patterns, not assume one channel behaves like the other.
Northline Apparel's e-commerce team reports a size-M T-shirt return rate of 22%, more than double the physical-shop rate of 9% for the same T-shirt. The team's own note cites "runs small" in several customer reviews.
The document Northline Apparel's merchandiser reads is three customer review excerpts, forwarded by the e-commerce team:
Is this an e-commerce-specific problem, or something that would show up in physical shops too if it is not caught? Decide before you open the answer.
It is very likely a genuine sizing or fit issue in the garment specification itself, not something e-commerce created. All three reviews describe the same fact: the size M is cut smaller than its size chart states. That is a fault in the garment's actual measurements against its stated size chart, not a fault of the e-commerce channel.
Why it shows up as an e-commerce statistic and not a physical-shop one. A physical-shop customer who tries on the same size M and finds it tight can simply pick a size L off the rack on the spot; the shop's system records a sale of a size L, not a return of a size M. The same fit problem exists in the physical shop, but it never becomes a logged return, because the customer fixes it before paying. The e-commerce customer has already paid and received the garment before discovering the same problem, so it becomes a measurable, recorded return.
The real fix. Check the garment's actual measurements against the size chart for the size M, a fit and specification issue for a later course, not a channel problem to be solved by changing the e-commerce return policy. Treating this purely as an "e-commerce problem" would fix nothing in the physical shops, where the same cut is quietly costing sales to a size the customer did not actually want.
Framed qualitatively, since this is a cost of process, not a fixed number: an e-commerce return costs more to turn back into sellable stock than a physical-shop exchange, because it needs shipping in both directions, a warehouse re-inspection before it can be trusted as resellable, and repackaging, none of which a physical-shop exchange requires. A sizing issue like the one in the scenario above adds this cost on every affected e-commerce return, on top of the cost of the return itself, for as long as the underlying specification problem stays unfixed. The physical-shop channel carries the same underlying fit problem without the same visible cost, which is exactly why relying on e-commerce return data alone can hide how widely a specification issue is actually affecting sales.
The Selling model decision sheet asks three questions, including "Will it be sold in the buyer's own shops/site, or resold to other retailers?" Adding an e-commerce channel does not create a new row to fill in; it changes what that row's two answers mean in practice.
Check the third row for your own order:
Check this before assuming e-commerce automatically means "own brand." A wholesale supplier resold only through someone else's site is still wholesale; the channel does not change the selling model the sheet calculates.
1. Is e-commerce a separate selling model from wholesale, private label and own brand?
2. Why do e-commerce returns typically take longer to turn back into sellable stock than physical-shop returns?
3. In the review scenario, is the higher e-commerce return rate proof that e-commerce customers are pickier about fit than physical-shop customers?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Channel | قناة البيع | Canal de vente | Satış kanalı | A route through which a business sells to its final customer: a physical shop, a website, or a marketplace. |
| E-commerce | التجارة الإلكترونية | Commerce électronique | E-ticaret | Selling a product to the final customer through a website or app, instead of, or alongside, a physical shop. |
| Size ratio | نسبة المقاسات | Ratio des tailles | Beden oranı | The split of an order's total quantity across the sizes offered, for example 1:2:2:1 for S:M:L:XL. |
| Return rate | معدل الإرجاع | Taux de retour | İade oranı | The share of pieces sold that customers send back, usually shown as a percentage. |
| Split channel stock | مخزون منفصل لكل قناة | Stock séparé par canal | Kanala göre ayrı stok | Holding separate stock for e-commerce and for physical shops, rather than one shared pool both channels sell from. |
| GSM | GSM | GSM | GSM | Grams per square metre: the standard way fabric weight is stated. |
You now know how e-commerce changes an order without being a selling model of its own. The next lesson brings every question from this course together into one decision: whether a business should change its selling model at all. Back to the course map