Channel Spyder started just like you. We were a small retailer looking to compete on eBay and Amazon. Our business model was based on high volume channel sales using a select group of drop ship suppliers. After setting up our stores and fighting to keep our ratings as high as possible, the real challenge became clear to us… Growing sales volume. We needed to be scalable.
We knew that to be competitive in channel sales, we had to keep our overhead low and maintain the flexibility to drop our margins as the market dictated. Unfortunately, the largest overhead number was labor. There was no way we could go from processing 50 orders per day to 500 orders per day without increasing our labor force.
The next challenge was inventory. As a small company, there were very few of us who understood the task of inventory management. Working with daily data files from an increasing list of suppliers, re-formatting & pricing these files, and then uploading them to the various sales channels became a full-time job. And, it had to be done every day, seven days a week.
After an extensive search, we identified a short list of technology partners who may be able to help us. That list got smaller as we presented them with the challenges faced by a small to medium size channel sales retailer. Their current customers were much larger than us. We didn’t have $5,000-$20,000 to spend on technology every month, no matter how many sales we made. Not to mention the startup costs and minimum contract periods.
So, we built our own solution. One channel at a time… One Supplier at a time. We didn’t know it at the time, but we were building another business. Over the course of several years, we found some great people to write the code needed. We took a crash course in working with electronic data and how computer systems talk to each other. We added more drop ship suppliers. We added more channels… eBay, Amazon, Sears, Buy.com, NewEgg, an ecommerce website, google shopping, and others.
Inventory files are coming from the drop ship warehouses and pushing out to the channels every day. Orders are moving electronically from the channels to the drop ship warehouses. Tracking is posting back from the warehouses to the channels in real time. All automatically. All we have to do is watch over everything and make sure it keeps working. Until… We realize that by dropping margins to stay competitive we’re dangerously close to being upside down at the end of the month.
Flying by the seat of our pants with the numbers worked OK when the margins were 25% and our order volume was low. With growing volume into the hundreds of orders per day, and margins getting pushed down every month we needed to know exactly where our numbers were. The channels give us the sale price, but what about shipping cost? Channel sales fees? PayPal fees? What was our net profit? And, how do we see all these numbers on EACH order for each channel and each supplier? It was time for an upgrade.
Back to the channel service providers we spoke to years earlier. Why not? We were making more money now. Maybe we are now big enough to afford their fees. We had some money going out every month to maintain what we had built on our own. Let’s see if they can help us with the reporting numbers, and if it makes sense we will scrap what we built for a better product.
Reality check… As our store count and supplier list had grown, so had the other channel service providers fees. Additionally, they were not integrated with any or our suppliers. So, we would have to absorb their up-front fees to add drop ship suppliers… If they would even offer to do what we needed. Tens of thousands of dollars in integrations and months to get it done. What about the reporting numbers we needed? Turns out the kind of detailed, drilled down, “all in” reporting we needed was not available.
Even the biggest players in the channel services market, just weren’t set up to help us continue to build a scalable drop ship business in our industry.
Needless to say, we decided to add the reporting and auditing tools to our existing program. It’s amazing the peace of mind we had knowing every day what our net profit was for each order and each channel. We had the ability to find the “bleeding” when necessary and stop it in hours instead of weeks or months. As our program progressed, we added graphs and charts to the reporting.
As the years passed, we realized that we had become as skilled at software design and channel integrations as we were at selling on the sales channels. In addition, our warehouse suppliers brought to our attention that our account paid far more reliably than many of their other smaller accounts. It was no coincidence that we always had money to pay our bills. We knew exactly what we were making on every order from the minute it shipped. Our order error rates were almost non-existent. Our channel store ratings were higher than all of our competitors. Why not, everything was running like a well-oiled machine.
Why not make our software solution available to our competitors? Medium size online retailers still needed a scalable solution for a drop ship business model. Their suppliers needed to know they could pay in full and on time. The sales channels are eager to have their sellers increase their listing conversion rates and buyer feedback ratings. We had a solution that did everything a medium size retailer needed to compete with much bigger players. It was simple to use, turnkey, and available for a fraction of the price of competing solutions.
Welcome to Channel Spyder!