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.”