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Match.com for Trading Partners

E-commerce retailers have had to either educate suppliers in the ways of electronic ordering and drop-shipping or search through hundreds of possible vendors to find those that already have the technology and experience to work with them immediately. A new system that plays matchmaker for trading partners lets e-tailers conduct searches based on the supplier's capabilities, and it presents a list of suppliers that match those criteria.

Bluestem Brands, whose brands include Fingerhut and Gettington, sells more than 45,000 products through its catalog and online venues. It is always looking for products to add to its offerings. But significant barriers to that expansion include not only finding the suppliers and products, but also getting those products into its catalogs and transacting with the supplier.

It may seem trivial for buyers to find suppliers, but finding the product is only a small part of the process of getting it to market.

Bluestem is making use of a product from SPS Commerce dubbed Trading Partner Directory that relieves its buyers of the tasks of traveling to tradeshows, discovering whether prospective suppliers have what it takes to do business with them, and setting up the electronic trading system to make the partnership viable.

“Like other retailers, we want to grow as quickly as possible and look at new categories that we don't currently carry,” said Ben Barras, vice president of supply chain for Bluestem Brands. “Our challenge is in those products where we don't have historic trend information. That means we have the risk of carrying inventory that we may not sell, but it also means we have significant administrative setup time for potentially unproductive products. When a new supplier has 100 new products, setting them all up in our product management system can be very time-consuming.”

The Trading Partner Directory lets suppliers list their products along with the pricing and other details needed when presenting them in catalogs, such as images, descriptions, sizes, and weights.

Barras says his company can download the product information the supplier has uploaded to the directory in the form of a standardized EDI 832 document, which can then be incorporated into a CMS system for presentation in a print or online catalog. “When we receive the information in this format, we bypass the manual keying in of the data, and the only review necessary is for auditing purposes before the catalogs go live.”

Just as important as product information for catalog orders is the supplier's ability to ship products directly to retail customers. This eliminates warehousing and multiple shipping routes, and it lets Bluestem evaluate the success of possible products by offering them for sale without having to inventory them. “Having the option to drop-ship products is a win-win,” says Barras. “Suppliers benefit because they can present a broader assortment than others.”

Suppliers that can drop-ship to retail customers offer an average of 35 products through the company, while those that can ship only to the company's warehouse average 16 products, he said.

Many of the suppliers that register at the SPS Commerce Trading Partner Directory also use its EDI services. “If a supplier is already linked up with SPS's EDI system, we can start doing business with them via EDI immediately,” says Barras. That eliminates a sometimes difficult on-boarding process that can delay the implementation of the trading relationship and the ability to sell products. “We are growing fast enough now that we really prefer to partner with suppliers that have drop-ship and EDI capabilities.”

7 comments on “Match.com for Trading Partners

  1. Daniel
    August 25, 2011

    Scott, it’s always better to go for a customized search rather than blindly believing the vendor> there are many websites, which helps us for a customized search based on the user input parameters. They list out the results with links, for the vendors and finally a cart for online purchase.

  2. FLYINGSCOT
    August 25, 2011

    I found this article fascinating.  I often wondered how easy it was to set up an online retailing business and simply work as an intermediary.  I wonder if the systems will get so slick that the role of the intermediary will disappear or do you reckon there will always be the need for the “middle man”?

  3. Scott Koegler
    August 25, 2011

    This function certainly makes it easier to find trading partners. As for setting up a business from scratch… this may help after the initial startup issues have been overcome. In order to use this particular system, the retailer needs to have the basics in place with regard to its online or catalog presence, and needs to be a subscriber to SPS Commerce's EDI services. But since you would want to be using EDI anyhow, that's not a big hurdle.

    The matching function allows the retailer to find suitable suppliers, but it also allows prospective suppliers to evaluate the retailer. So it's a 2 way conversation, which is ultimately a good thing for everyone.

    As for intermediaries – the retailer remains firmly in the middle here as the presenter of the catalog. This system is not open to the public as a shopping search system. It is strictly for wholesale connections.

  4. mario8a
    August 25, 2011

    Hi

    I'll like to know how this was measured?  35 Vs 16 products, is this into an specific market? retail? distribution channels?

    It will be interesting to see some numbers on their revenue % increments during last year.

    “Suppliers that can drop-ship to retail customers offer an average of 35 products through the company, while those that can ship only to the company's warehouse average 16 products, he said. “

     

  5. Scott Koegler
    August 25, 2011

    The measurement of the 16 vs 35 products represents an average of Bluestem's customers. I don't think there was any particular magic analysis to arrive at them… just an average of those suppliers who do provide the ability to drop ship versus those that do not. We did not discuss revenue. 

  6. Taimoor Zubar
    August 28, 2011

    It does seem a great idea to let suppliers add their products and descriptions themselves. I am just wondering how the system caters to this when suppliers update any information about the products. Do the updates get reflected in the catalogs? In case of online catalogs, this does seem feasible, but it can be a problem in printed catalogs.

  7. prabhakar_deosthali
    August 29, 2011

    I would call this a useful link of the reverse supply chain

     

    Customer >> retailer >>  BULK SUPPLIER >> manufacturer

     

    So insted of the manufacturer pushing his products to the wholesaler and he in turn establishing retailer netwrok , this is working other way round.

     

    So it is the customer pull that will make retailers to look for supplies of certain products and the facilitator is here helping to establish this reverse link.

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