Manufacturer, Sakura of America, Begins E-commerce in Win-Win Situation; Consumers Get Breadth of Product Line and Expands Traditional Distribution Channels

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Mid-sized mfgr sells direct online to consumers, expanding access to breadth of product lines w/o upsetting traditional distribution channels.

When Sakura of America's first direct online order was made and fulfilled for one of its specialty craft markers, a single white Pen-Touch® Calligrapher valve-action marker, the Hayward, CA, company knew it had made a step in the right direction.

Sakura, a mid-sized Bay Area manufacturer with an extensive product line of pens, markers, and art materials had the same problem that many manufacturers their size has. Wholesalers and retailers naturally wanted to stock the most popular and fastest of a product line and didn't want to sell seasonal or more niche-oriented Sakura products.

Sakura's e-mails from consumers said differently. Peter Ouyang, Sakura's Director of Marketing, explains, “People were telling us they wanted to buy all of our products and it was frustrating for us to tell them that there weren't any stores nearby where they could buy them.”

Sakura concluded it had to sell directly online to fulfill demand for the breadth of its product line, but it didn't want to upset its well-established wholesaler and retail customers by competing with them.

Then Sakura met FirePoppy, Inc, a San Luis Obispo based company, whose Shopatron network solution rewarded everyone regarding e-commerce: manufacturer, wholesaler, and retailer.

Sakura wanted to achieve a few things before implementing e-commerce. As mentioned, they didn't' want to compete with their traditional retail customer base nor did they want to take on new responsibilities of fulfilling orders from consumers for one marker, for example.

To answer the first concern, Shopatron allows that consumer purchases for products are bid on by retailers according to geographic proximity to consumers, with first choice going to the retailer closest to the consumer. If the retailer didn't want to or couldn't fulfill the order, the bidding would spread to other participating retailers.

One of Sakura's current retail customers located in Missouri and well versed in e-commerce fulfillment stepped up to the plate and agreed to be their backup fulfiller, a retailer of last resort, if nearby retailers didn't carry a specific item or no other retailers wanted to bid on the order.

Sakura also did not want to disappoint consumers who have high expectations of promptly receiving products from large online e-tailers like Shopatron, however, reassured them by stating that 80 percent of all orders arrived at their destination within two days.

Shopatron claims an average manufacturer return-on-investment of 25-to-1 in the first year. The Shopatron model also allows retailers to find new customers in their own neighborhoods without expensive direct mail or newspaper advertising. Sakura has already received responses from retailers expressing gratitude for this new opportunity to reach a customer base, cost-efficiently.

Ed Stevens, CEO of FirePoppy, Inc. came to his e-commerce model in the usual roundabout epiphany common to many entrepreneurs.

A Stanford grad in Russian Language and Literature, Stevens lived in Russia after graduating. In 1995, he founded a business importing and distributing model engines from Russia. Shopatron was conceived and developed as a solution to problems Mr. Stevens faced when marketing products in the model-hobby industry.

So far, so good for Sakura and Shopatron: It's only been a few days, but online sales are currently outpacing its breakeven by 50 percent with consumers spending, on average, a little more than $24 per purchase. For both companies sake, they hope this trend continues and provides another mid-sized manufacturer to compete in the e-commerce marketplace without disrupting established distribution channels--just expanding them.


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