The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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By comparison, he adds, the old way of writing down customers' product requests was time-consuming and subject to errors in how products were described and ordered.
NuOrder, whose services are free to retailers, charges brands an annual fee starting at less than $10,000, depending on the number of product-display features a client uses and the amount of integration required with a brand manufacturer's back-end product catalogs and inventory management software, CEO Heath Wells says.
Virtual buying trips
TradeStone Software recently launched a portal that, like NuOrder, enables retailers to browse among images and descriptions of products posted by suppliers. Merchants are currently testing the portal, which is called Bamboo Rose. Unlike NuOrder, however, Bamboo Rose charges monthly fees to retailers as well as suppliers.
For those fees, which Bamboo Rose declined to specify for merchants, retailers can go on virtual buying trips, the company says. Retailers can load photographs of product styles they'd like to buy, invite other merchandise-buying colleagues to insert comments or load their own images of suggested products, then request input including product images from suppliers in the portal. Suppliers can comment on a retailer's requests, saying whether they can provide something exactly the same or similar, and provide pricing and delivery times.
Once the retailer and supplier agree on a transaction, the retailer can click into the TradeStone software via a Tell Tradestone button to start the buying process by issuing requests for quotes, or RFQs, and exchanging documents such as purchase orders, invoices and advance shipment notices.
Tuning up rare orders
Some retailers use more than one portal, while others build their own integration with suppliers.
Korg USA, a distributor of musical instruments and equipment like electronic keyboards and guitar amplifiers, forwards orders to retailers' e-commerce sites through a dealer locator on its web site as well as through Shopatron via a Buy Now button on product pages. It also operates its own web portal, developed internally, where dealers file electronic purchase orders and receive invoices and shipping notices when ordering Korg products. The portal also serves as a central location where dealers can file warranty and service requests and order parts and replacements, says William McGloine, director of information technology.
Korg uses its portal, and Shopatron, to monitor consumer demand via dealers' order requests and shipments. For instance, after noticing an unexpected interest in its MS-20 Korg synthesizer, an analog instrument popular in the 1970s for its unique sound and filters, it decided to produce the MS-20 mini to ring up new sales.
"It was wildly popular back then, and demand is very high for it now," McGloine says. Although he can't say what kicked off renewed interest in the MS-20, he says customers are drawn to its unusual sound. "There are sounds unique to that keyboard."
Still another approach is helping to match consumer demand with production to boost sales at Saddleback Leather Co., an online retailer of leather goods like shoulder bags, purses and belts.
Saddleback uses NetSuite Inc.'s OneWorld software suite to manage its back-end financial and inventory management and its consumer-facing e-commerce site. The setup supports the operations of two companies closely related to Saddleback: the TrueBlue Production manufacturing company that makes its leather goods, and the Chamberlain Shipping fulfillment house, which ships Saddleback.com's orders. By integrating the three companies into the NetSuite software, Saddleback can better plan the production of items that consumers want and ensure that enough of the most popular products are in Chamberlain's fulfillment center ready to ship, says Dave Munson, president and founder of Saddleback and co-partner in TrueBlue with Saddleback CEO Chuck Bowen.
The NetSuite setup also includes an integrated demand-planning application from Valogix, which compiles and analyzes information on Saddleback sales and the materials used in producing its goods. The system enables Saddleback and TrueBlue to automatically share information and respond better to customer demand while also replenishing stock, Saddleback operations manager Blake LeBrun says. Valogix is a member of NetSuite's SuiteCloud Developer Network, a program for independent software vendors that provides access to development tools and technical assistance from NetSuite.
For example, when a customer in the 2012 holiday shopping season wanted a small leather briefcase that Saddleback didn't have in stock, the combined NetSuite and Valogix system let the shopper request it on back order while the system forwarded the order details, including the necessary production materials, to TrueBlue. The customer received an order confirmation promising delivery by Christmas, saving the sale and winning a new customer, Munson says.
With Saddleback's former homegrown e-commerce platform, processing such a special order would have required a manual process of changing information in spreadsheets and sending them to TrueBlue—a project that would have received little attention during the busy fall shopping season.
As Saddleback and other retailers have learned, the more information they share with suppliers, the more they can win sales.
A sampling of trading portals
Bamboo Rose: Available as an iPhone and Android app and at BambooRose.com, it lets retailers load images of desired items, view available products from suppliers, and communicate with potential trading partners. Retailers pay an annual fee, based on portal usage, which the company declined to specify; suppliers pay a flat annual fee of $900.
NuOrder: Available on an iPad app and at NuOrder.com, it lets retailers browse among available products from manufacturers and share comments with colleagues and suppliers. Manufacturers pay annual fees starting at $10,000.
Shopatron: Through the Shopatron Manufacturer application, retailers can win orders placed by customers on consumer brand manufacturers' web sites. The manufacturers forward the orders to a Shopatron online portal, where participating retailers can click to fulfill orders. Retailers pay commissions on orders ranging from 7% to 12%, plus $1.29 per package; manufacturers pay set-up fees starting at $4,490 and monthly subscriptions starting at $129.