BuildDirect becomes the latest e-retailer to create a marketplace
February 17, 2016 03:50 PM
Experiencing demand for its own home improvement products, building materials retailer BuildDirect Technologies Inc. is letting others in on its success.
BuildDirect, No. 194 in the Internet Retailer 2015 Top 500 Guide, launched BuildDirect Home Marketplace last week as an online platform where suppliers and manufacturers of home improvement products, such as furniture and flooring, can sell through BuildDirect.com. Through the marketplace, consumers have a wider selection of products—the site has 7,000 SKUs and that’s expected to grow this year. Sellers also can use BuildDirect’s analytics as well as six warehouses in the United States to store inventory.
“We are experts in shipping heavy-weight home improvement products and now we have opened up our technology to the industry,” says BuildDirect co-founder and CEO Jeff Booth. “Sellers can get better information through our data, so they can remove costs from their supply chain and provide high-quality products for less.”
Real-time data is available to sellers on the Home Marketplace seller dashboard, which shows customer demand for products and locations where products perform best, Booth says. On the platform, BuildDirect provides projections of sales for each products, as well as an estimate of what the retailer could be making if it made adjustments. For example, a retailer using BuildDirect’s warehouses on the East Coast could shift to West Coast facilities and reduce shipping costs if demand is stronger in the West.
Booth says the percentage BuildDirect takes from each purchase on the marketplace varies based on the product category.
BuildDirect began in 1999 selling home building materials and has expanded to categories including furniture, landscaping and outdoor products. The company grew an Internet Retailer-estimated 66.4% year-over-year in 2014, to an Internet Retailer-estimated $149.8 million from $90 million in 2013. Booth would not disclose 2015 sales, but says the company intentionally slowed growth last year by cutting advertising and marketing in an effort to keep up with demand from customers.
Handling demand from customers has been a struggle for BuildDirect. The British Columbia, Canada-based e-retailer struggled to keep some items in stock, but the online marketplace should help as the addition of products from other sellers gives customers more options, Booth says.
Through the marketplace, customers also have access to a virtual design tool that allows them to place flooring materials and appliances in a blueprint of a room. Currently, the tool is available only for bathrooms, but customers will be able to design kitchens on the site in April, Booth says.
In December 2014 BuildDirect raised $50 million in Series C funding to invest in the technology for its Home Marketplace. To date, the company has raised $112.21 million, according to Crunchbase.