How Shop.com added 100,000 items from 40 drop-ship suppliers
January 18, 2016 01:23 PM
General merchandise e-retailer Shop.com is adding about 100,000 items from 40 vendors to its e-commerce marketplace by using a cloud-based service from SPS Commerce that acts like LinkedIn to connect to qualified drop-ship vendors that ship orders directly from their warehouses to online shoppers.
By adding the vendors, Shop.com, which historically has sold mainly cosmetics, skin care and health and nutrition-related products, adds new product categories, says Eddie Alberty, vice president of strategic partnerships.
New items include such consumer electronics items as TV sets, gaming systems and tablet computers, and consumables like soup, spices, olive oil and garbanzo beans, says James Ferrier, senior marketplace account executive for Shop.com, No. 64 in the Internet Retailer 2015 Top 500 Guide. The retailer also wants to increase products in the apparel, home goods and consumer packaged goods categories.
“It’s all about differentiating and getting to market as quickly as possible,” Alberty says. “We want to be as efficient as possible in offering as many products as we can.”
The retailer sought out a vendor to handle relationships with suppliers that offer drop-ship services after finding the process of vetting each drop-shipper arduous, as each has different requirements, Alberty says. Shop.com reviewed 10 sourcing options before choosing SPS Commerce and spent about six months setting up a link to SPS’ retail network, Ferrier says.
The SPS Commerce service, called Sourcing, leverages the vendor’s network of 2,000 retailers and 60,000 vendors, distributors and logistics providers. The service pinpoints which vendors, distributors and logistics companies meet the retailer client’s needs, and then tests and ultimately connects the retailer and well-matched suppliers.
“The retailer can log onto our system, identify the products they want to sell, set up communications with the vendor and set up a buying relationship,” says Peter Zaballos, vice president of marketing and product with SPS Commerce.
“It’s like using LinkedIn,” Zaballos says. “The retailer clicks a button to connect to the other party. We convert the item information. The retailer connects to us once. After we set up the connection, the retailer logs into a company dashboard and sees a summary table listing the new vendor. The result is that the retailer doesn’t have to hunt and peck for vendors and figure out each vendor’s requirements.”
Retailers pay no fees for the service; vendors pay monthly subscription fees that start at $60 and vary depending on the complexity of each deal and the number of products to be sold and fulfilled, Zaballos says.