October 28, 2004, 12:00 AM

Where outsourcing is not a dirty word

(Page 3 of 4)

Its initial development partner, iCode Inc., failed to provide the scalability that CrazyGrazer had expected, Hall adds. Hall admits that iCode, which provides e-commerce technology designed for small companies, wasn`t the only one that came up short. CrazyGrazer had selected iCode on the recommendation of its then-CTO, who had used iCode`s Evererst e-commerce platform in the past, and the retailer had retained a third party developer in India to modify the Everest system. "We researched the market, and iCode met our cost and functionality needs," Hall says.

A dual lesson

Although iCode had indicated that its technology was scalable to meet unexpected demand, no one expected CrazyGrazer to attract 1.2 million visitors on its first day. An iCode spokesman declines to comment specifically on the CrazyGrazer matter, but notes that iCode has since developed more robust e-commerce technology.

The experience served a dual purpose for CrazyGrazer, Hall says. "It validated our business model, because so many people came to see us, but we realized we needed a more robust technology package."

When CrazyGrazer could not fix its site in time for the 2003 holiday shopping season, it decided to take the time to build a completely new e-commerce platform. It considered the months and the millions of dollars it had spent on the first site as a learning experience. "We knew we weren`t going to make the holiday season in `03, so we focused on holiday `04," Hall says.

To assure that all went well the second time around, it decided to do everything in-house. It hired a new CTO, who spent the next 10 months and $5 million building a site on an Oracle Corp. platform.

But several months into the new project, Hall again realized that things weren`t going as smoothly as he had hoped. His grand design of launching with more than 1 million products in more than a dozen categories, with a multi-featured site and connections to a broad network of drop shippers, proved too extensive to build and launch within a year. It appeared that, once again, CrazyGrazer would miss its chance to launch in time for the holiday shopping season--a key part of the fledgling company`s hope of building a fast cash flow once it began operating on the web.

The second crash

Then a business associate called Hall`s attention to Vcommerce, which the associate described as a company known for supporting entrepreneurs like Hall with ambitious growth plans. The two companies hit it off.

For the second time in less than a year, Hall and his team forfeited months and millions of dollars spent on building an e-commerce site. Because Vcommerce was able to show how it could get CrazyGrazer up and running quickly on its hosted RetailVantage e-commerce platform, Vcommerce now handles CrazyGrazer`s entire e-commerce platform, including order management, site analytics, site search, shopping cart, fulfillment and returns management.

To make CrazyGrazer stand out in a crowded field of online retailers, Hall and company say they have pushed forward an e-commerce platform designed to provide a shopping experience that`s both fun and helpful for its customers. For example, much of its inventory is delivered to customers through drop-shipping arrangements with suppliers, and CrazyGrazer pulls information on pricing and shipment availability from multiple suppliers within a fraction of a second to present shoppers with the best mix of product specifications and pricing. "Our system grabs information from our suppliers` inventory records to see who has what at the best price, and by figuring the proximity of different suppliers to our customer, who has the cheapest drop-shipping charge," Hall says.

After two months of development work by Vcommerce, including connections to CrazyGrazer`s suppliers, the new site went live on Oct. 1 without a problem, Hall says. "Their system is so robust, we can`t overload it," he says.

CrazyGrazer has complete control of merchandising, he adds. Vcommerce`s RetailVantage system offers a dashboard administrative tool, designed to be used by business managers instead of IT experts, that lets them directly control the placement and editing of merchandising promotions. After logging onto a password-protected administrative web page, Hall`s merchandise managers can move a merchandising display to a different position on an e-commerce page with two clicks of a computer mouse. They can also use the mouse to change product descriptions and pricing and to download new images.

Although other content management tools provide similar administrative features, RetailVantage differs in that users can see the results of their changes on an actual web page within a few seconds, says AMR`s Garf, who has reviewed the system.

Swimming with the tide

Big Al`s, a Toronto-based retailer of aquatics products, operates 20 stores in Canada but does most of its sales on the web at BigAlsOnline.com. Online traffic and sales have grown steadily since the company`s e-commerce debut in 1999, a period during which monthly traffic grew from about 100,000 visitors to about 3.5 million, says Dan Hamilton, director of Internet sales.

But after getting through last year`s holiday shopping season, Big Al`s realized it needed to replace its original platform hosted by a Toronto e-commerce services provider. "Our old system was having an issue with downtime, because the back-end wasn`t up to par," he says.

Earlier this year, Big Al`s switched to an e-commerce platform hosted by Novator Systems, also based in Toronto. Novator provides a complete e-commerce system, though Big Al`s has retained the ability to control merchandising by directly changing images and product descriptions.

Novator has integrated order management, fulfillment and shipping services, replacing many of the manual processes that had restricted Big Al`s ability to process orders. "We`ve gone from struggling to handle 300 orders a day to handling 800 to 1,000 orders a day," Hamilton says.

No more re-keying

Under its old system, the retailer had to print out orders received on the web and re-enter order information into a warehouse management system, which would print a pick-and-pack order for warehouse workers. Once warehouse workers verified that an order was packed, on-site UPS drivers would receive order information to key into their UPS shipment system. Now, the order management, warehouse management and UPS shipment systems are integrated. When web orders are received, they`re automatically shared with the order, warehouse and shipment systems, Hamilton says.

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