Catalog and online retailers have some different approaches to product selections than do brick and mortar retailers. For one thing, they rely on photos and text descriptions rather than products on shelves. They also have an advantage in that they don’t necessarily have to stock their merchandise, and can elect to have their suppliers ship directly to the consumer. Finding suppliers that have those capabilities is the key to e-commerce retailers’ ability to grow rapidly.Bluestem Brands, whose brands include Fingerhut and Gettington, sells more than 45,000 products through its catalog and online venues. The company is always exploring additional products to add to its offerings. But a significant barrier to that expansion includes not only finding the suppliers and products, but getting those products into its catalogs, then transacting business with the supplier.
While it may seem trivial for buyers to find product suppliers, simply finding the product is only a small part of the process of getting the products to market. Bluestem is making use of a product from SPS Commerce dubbed Trading Partner Directory that relieves its buyers of having to always travel to trade shows, discovering whether prospective suppliers have what it takes to do business with them, and finally setting up the electronic trading system necessary to make the partnership viable.
According to Ben Barras, Vice President, Supply Chain for Bluestem Brands, “Like other retailers, we want to grow as quickly as possible and look at new categories that we don’t currently carry. 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 its details including not only pricing, but also those attributes and images that are needed when presenting products in catalogs, such as product images, descriptions, and sizes and weights. Barras explains that his company can download the product information the supplier has uploaded to the Trading Partner Directory in the form of an EDI 832 document - a standardized document that can then be incorporated into a company’s CMS system for eventual 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,” says Barras.
Just as important as product information for catalog orders, is the ability of the supplier to ship products directly to retail customers. This eliminates warehousing and multiple shipping routes, but it also lets Bluestem evaluate the success of possible product offerings by allowing the company to offer products for sale without having to inventory them. “Having the option to drop ship products is a win-win,” explains Barras. “Suppliers benefit because they can present a broader assortments than others.” Suppliers who can drop ship to retail customers offer an average of 35 products through the company, while those that can only ship to the company’s warehouse average 16 products, according to Barras.
Many of the suppliers that register at the SPS Commerce Trading Partner Directory are also users of SPS Commerce’s 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 onboarding process that can delay the implementation of the trading relationship, and the ability to start selling products. As Barras points out, “We are growing fast enough now that we really prefer to partner with suppliers that have drop ship and EDI capabilities.”