The e-retailer heads into the holiday shopping season behind a 30% increase in fulfillment spending and a widening net loss. North American sales increased ...
Build.com wants to sell on MercadoLibre, Latin America’s largest marketplace operator later this year.
Home improvement e-retailer Build.com started selling internationally in January through eBay Inc.’s global shipping program. In just four months, the e-retailer’s international sales increased 1,100%—from just $5,000 in January to $60,000 in April—and orders have shipped to 28 countries.
Now the e-retailer is eyeing a new marketplace.
By late summer or early fall, Josh Bultz, Build.com’s vice president of marketplaces, hopes to be selling on MercadoLibre, Latin America’s largest marketplace operator. MercadoLibre runs localized online marketplaces in 13 countries and accounted for more than 15% of e-commerce sales in Latin America in 2012, according to the Internet Retailer 2013 Latin America 400.
Going international was as easy as turning on the "global ship" feature in eBay, Bultz says. Before that, Build.com sold only to the United States and Canada because of the complexity of international shipping paperwork and the company’s method of having manufacturers ship their own products to customers rather than aggregating all of Build.com’s products in a warehouse. That is known as drop shipping.
The international paperwork, Bultz says, requires a “country of origin” and many of Build.com’s products—including products from Wisconsin-based Kohler—come from many countries. “One Kohler SKU could be made in Russia, China or Turkey,” he says. “That would require, prior to shipping, someone to open the box and find out where that one specific unit was made. That’s impossible for our vendors to do.” Using eBay’s program, Build.com’s manufacturers ship the products to an eBay facility in Kentucky, and eBay handles the paperwork.
Bultz says Build.com will only expand to MercadoLibre if the company's merchants are able to ship to a domestic location, and the marketplace takes it from there—similar to eBay's program.
Build.com has noticed a different product mix with its international customers. A lot of times, they are now able to buy products that were previously unavailable, Bultz says. “What’s interesting is that products we are selling a lot of internationally are ones we tend to not sell so much here because we’re not so competitive on price,” he says, “These customers are simply looking for the products, and our competitors are not exposing those products internationally.”
The move to international marketplaces comes shortly after Build.com’s entry into U.S. online marketplaces. Build.com launched in 2000 but did not debut on its marketplace until 2012. Build.com has been on the Internet Retailer Top 500 Guide for several years, reaching No. 79 in 2014, and executives didn’t see the need to sell on marketplaces. But in 2012, Bultz says, its competitors The Home Depot and Amazon—Nos. 16 and 1, respectively—began to get really smart about selling in its category, and Bultz convinced the company to go ahead with marketplaces.
When Build.com launched that year on Amazon and eBay marketplaces, the e-retailer took a do-it-yourself approach. Certain challenges arose, Bultz says. Every time Amazon or eBay would update their platforms, Build.com would have to update its integration programming, which led to lost orders and unsatisfied customers.
“Going direct to the marketplaces was creating a level of cost and overhead that was not good for anyone,” Bultz says. After evaluating several options, the company selected ChannelAdvisor Marketplaces to help integrate and manage its presence on marketplaces. “The partnership has allowed us to quickly scale without me having to go back to programming,” he says. Build.com will use ChannelAdvisor for its expansion to MercadoLibre as well, Bultz says.
“We’re excited that Build.com is looking for opportunities to sell internationally,” says David Spitz, ChannelAdvisor’s president and chief operating officer, “and we believe that we can help the company can reach its e-commerce goals.”