Newegg offers services to startups
June 14, 2016 01:28 PM
Online retailer Newegg Inc. is offering fulfillment and marketing services for startup companies raising capital on crowdfunding platform Indiegogo.
Newegg will provide marketing assistance, merchandising and social exposure, as well as order fulfillment, shipping and other logistical support through its Shipped by Newegg program, thee-retailer says. Indiegogo is an online fundraising platform that lets fledgling businesses make pitches to individuals for small investments. Newegg will select the Indiegogo campaigns that the e-retailer will offer its services to, the company says.
“Select Indiegogo campaigners will have access to marketing support, reduced commission rates and fulfillment benefits via the Shipped by Newegg program, helping them drive brand awareness and convert sales,” Sophia Tsao, vice president and head of marketplace at Newegg, says.
Newegg, No. 17 in the Internet Retailer 2016 Top 500 Guide, is a web-only retailer of computers components and other technology products, and operates its own online marketplace, allowing other merchants to sell directly on Newegg.com. Newegg offers its Shipped by Newegg program to its more than 10,000 marketplace sellers. The program provides warehousing, shipping and returns management, similar to Amazon.com Inc.’s Fulfillment by Amazon service for sellers on Amazon.com, No. 1 in the Top 500.
“Our Shipped by Newegg program serves to satisfy the demand for turnkey fulfillment services, which is much more cost-effective than Fulfillment by Amazon,” Tsao said in February. Newegg says that compared with its competitors, including Amazon, its pick and pack fee is 5% lower (75 cents per unit) and its handling costs are at least 14% lower. In comparison, Amazon’s pick and pack fee for orders placed on Amazon.com is $1.06 per unit, and for orders placed through other sales channels, such as a retailer’s own site, the fee is 60 cents, according to Amazon’s website.
Newegg launched its marketplace in 2011 to expand the number of products and categories it sells, Tsao says. The retailer now lists more than 27 million SKUs on Newegg.com. To date, 30 million shoppers have purchased on Newegg since launch and sales in its marketplace business grew 40% in 2015 compared with 2014, Tsao says.
Newegg is one of several retailers in the Top 500 that have opened their e-commerce sites to other merchants. Others include Wal-Mart Stores Inc. (No. 4), Sears Holdings Corp. (No. 14) and Bluefly Inc. (No. 223). Read more about these marketplaces, as well as others such as those operated by Amazon and eBay Inc., in the newly released online marketplaces report: “Online Marketplaces: The Shopping Mall of the Future.”