screen scraper<\/a> that pulled the list of all classes and their books into a single searchable view for buyers visiting the site. \u00a0Listing your book to sell based off the ISBN number was even easier.<\/span><\/p>\nI built a number of screen scrapers against Amazon, Barnes and Noble, and Varsity Books. \u00a0With that data I was able to append additional information about the books, including cover photos, editions, and dates, all into the listing.<\/span><\/p>\nThe small campus bookstore was none too happy with the competition, but within two years they had duplicated the effort for their own marketplace.<\/span><\/p>\n![\"\"](\"https:\/\/keith.resar.org\/blog\/wp-content\/uploads\/2018\/10\/carlbooks_screenshot.png\")
<\/p>\n
The Solution<\/b><\/p>\n
I found a merchant in Malaysia who had a massive inventory of International Student Edition textbooks and was able to ship them via UPS two-day air for an excellent price. \u00a0Unfortunately, his web site just wasn\u2019t navigable to English speakers or anyone looking for a one-off purchase.<\/span><\/p>\nThe solution can be easily split into two primary categories – front end and back end. \u00a0Implementation for both was non-trivial, but required for a scalable enterprise. On our peak sale days, before the start of Fall and Spring semesters, we would process well over a hundred transactions per day.<\/span><\/p>\nFront End Technology Solution<\/b><\/p>\n
The marketplace was fragmented, so success required a consistent and frictionless experience.<\/span><\/p>\nI made liberal use of all the data I was able to acquire about these books from their ISBN numbers, such as official title, edition, publication date, summary, and photos. \u00a0What better way to start establishing trust with potential customers than by given them tons of information about the book they were looking at?<\/span><\/p>\nAll books were posted on my e-commerce site. \u00a0Of course, no one knew where or how to find my site – but in the time of new product aggregators, this wasn\u2019t a problem at all.<\/span><\/p>\n![\"\"](\"https:\/\/keith.resar.org\/blog\/wp-content\/uploads\/2018\/10\/Screen-Shot-2018-10-20-at-9.56.26-PM.png\")
<\/p>\n
Froogle, by Google, was the best known product aggregator at the time. \u00a0As a site owner you could format a special file with your inventory for them to scan or even create a near real-time data feed. \u00a0Either way, Froogle wanted nothing more than to make the textbooks as discoverable as possible.<\/span><\/p>\nComparing my site with all other sites selling textbooks, it appeared \u00a0I had different customer acquisition strategy. While others depended on direct traffic or perhaps organic traffic to their main page, my site had no brand nor expectation of repeat business. \u00a0Therefore I focussed on showing books that matched buyer intent. All relevant Google searches highlighted matching product listings and there were almost no competing links.<\/span><\/p>\nGiven the high buyer intent for all inbound clicks, our conversion rate was an astounding 65%. \u00a0It was predictable enough to fund even the low-cost PPC ads during the 2005 time frame when this site was active. \u00a0Given the prominent placement from Froogle, there was no need to even consider that.<\/span><\/p>\n![\"\"](\"https:\/\/keith.resar.org\/blog\/wp-content\/uploads\/2018\/10\/froogle_screenshot.png\")
<\/p>\n
Froogle eventually disappeared as a separate entity and current Google mechanisms for product data feeds aren\u2019t as accessible as they once were. \u00a0Thankfully these changes occurred long after this venture wrapped up.<\/span><\/p>\nI tried other outlets as well, including a few listings of the more popular titles on eBay. \u00a0Sales followed the long tail model more than anything, which made it difficult to achieve critical sales thresholds on a listing site like eBay. \u00a0In the end these markets were too soft and didn\u2019t have the volume needed to support the automated processes I built in the backend.<\/span><\/p>\nBack End Technology Solution<\/b><\/p>\n
The heart of the whole operation was the backend automation, without which the effort just couldn\u2019t have scaled. \u00a0This was a cyclic business with traffic at the start of the Fall and Spring semesters accounting for 80% of all yearly sales – all in just a one or two week period. \u00a0During these biannual sales spikes, I easily managed product ordering, tracking, customer communication, and payment collection through completely automated systems.<\/span><\/p>\nAs this was before the advent of more accessible SaaS offerings designed to be easily wired together, all this activity was built and maintained in-house. \u00a0From start to finish, here were the major steps in the automated workflow.<\/span><\/p>\n1 – Inventory management<\/span><\/span><\/p>\nMy distributor partner maintained a web site with cryptic and ill-defined product listings. \u00a0I regularly pulled a current inventory listing from an XML source he maintained and used that to update the inventory products and quantities in my system of record.<\/span><\/p>\n2 – Data cleansing and appending<\/span><\/span><\/p>\nThe only trustworthy data from that inventory feed were the product keys, which in the case of books are ISBN numbers. \u00a0Given these numbers I was able to extract pictures, titles, descriptions, and pricing information from Amazon and a few other large e-commerce sites.<\/span><\/p>\nI had a few algorithms in place for automated pricing that factored in:<\/span><\/p>\n\n- Cost of new and used hardcover (non-International Student Editions) books from Amazon and a few other major e-commerce sites<\/span><\/li>\n
- My cost to purchase the book, ship it, and cover payment card transaction fees<\/span><\/li>\n
- A minimum 30% margin<\/span><\/li>\n
- Listing price at least $40 (and often much more) below the lowest offered elsewhere<\/span><\/li>\n<\/ul>\n
3 – Sharing product data feed<\/span><\/span><\/p>\nI generated my own product data feed, with more verbose output, for consumption by Froogle. \u00a0Google prioritized then, just as it does now, wordier content with rich details. In the early days of product aggregators there was no pay for placement, therefore these listings were easily highlighted based on merit alone.<\/span><\/p>\n4 – Order placement<\/span><\/span><\/p>\nThe goal was zero friction to place an order, therefore I broke with the entire concept of \u201ccreate an account to make a new order\u201d that was all too prevalent at the time. \u00a0After all, what are the chances that someone would organically re-discover this same site during a subsequent textbook purchase?<\/span><\/p>\nWhen the order was placed I\u2019d issue an auth against the buyer\u2019s credit card. \u00a0I never charged prior to shipping the book which decreased risk from chargebacks should there be any shipping delays. \u00a0This also helped reduce payment card fees should the order fail to ship for any reason.<\/span><\/p>\n5 – Distributor order placement<\/span><\/span><\/p>\nNew customer orders needed to be placed with my upstream distributor for direct shipping. \u00a0This phase was one of the most complicated and aside from my front-end discovery solution, was most of the value I offered in the transaction.<\/span><\/p>\nThe distributor\u2019s ordering web site was a maze of inconsistent web pages, likely meant for navigation exclusively by an oracle. \u00a0With sufficient screen scraping, I was able to complete the shopping card process for each order where I would select the product and submit the shipping details.<\/span><\/p>\nPayment was required at this time and could only be submitted via PayPal. \u00a0A host of additional automation was required to complete this off-site portion of the transaction.<\/span><\/p>\n6 – Distributor shipping<\/span><\/span><\/p>\nShipping times varied, ranging from hours to, on a few occasions, weeks. \u00a0Excusing the extremes, a typical order would ship within two days. My tooling regularly polled the status of all orders to determine when they actually shipped. <\/span><\/p>\nUpon order shipment two things happened. \u00a0First, I\u2019d send a delivery confirmation and tracking email directly to the customer. \u00a0After that, I\u2019d capture the customer\u2019s payment. The payment side is where this entire enterprise became tricky during the peak seasons.<\/span><\/p>\nThe money flow worked something like this:<\/span><\/p>\n\n- New order – customer card auth. \u00a0This is just a reservation for payment and more than anything else, it makes sure the customer card has sufficient credit for the charge.<\/span><\/li>\n
- New distributor order – via PayPal instant transfer. \u00a0However, I\u2019d need to refill the funds in my PayPal account in advance which required at least a three business day bank transfer.<\/span><\/li>\n
- Order shipment – capture customer payment. \u00a0Customer payments would settle from their bank to my merchant account and be available for withdrawal after seven days.<\/span><\/li>\n<\/ul>\n
The delays transferring money into the PayPal account, delays from shipping product, and finally the delays settling customer payment back into my account were incredibly challenging. \u00a0During peak periods, I would regularly cover close $40k to $50k \u201cstuck in the ether\u201d while everything was in motion.<\/span><\/p>\n7 – Customer delivery<\/span><\/span><\/p>\nAll orders were shipped via air and trackable so I knew as soon as delivery was successfully completed. \u00a0If the delivery address was wrong or the package couldn\u2019t be delivered, then this whole automated system would fall apart.\u00a0\u00a0<\/span><\/p>\nIn those scenarios, I\u2019d typically have the problem package redirected back to my office where it would sit in local inventory and become a near-guaranteed loss. \u00a0As much as I loved all the back-end automation, there was no good way to insert an exception and ship out one of the few returns that were sitting around. <\/span><\/p>\nMy loss on one of these sales gone wrong was too high. Paying for product from the distributor, shipping, and transaction fees for both the sale and the refund made me uncomfortable when there were so many sales in flight.<\/span><\/p>\nThe Last Days<\/b><\/p>\n
Our collaboration lasted over two years and only wound down as his inventory began to dry up. \u00a0Unfortunately, I learned of inventory unavailability only when the distributor cancelled open orders that couldn\u2019t be fulfilled. \u00a0The money tied up on non-processable orders as well as the justifiably upset customers left me wanting to continue in the e-commerce space but to reduce the two areas I just couldn\u2019t control with this partnership: high cost of goods sold and low control over executing on customer orders.<\/span><\/p>\nLessons Learned<\/b><\/p>\n
The first lesson is that automating everything is the only way to scale, although that may have been a self-fulfilling requirement given my background in tech rather than anything in the retail space.<\/span><\/p>\nToo much of the overall success was being in the right place at the right time and executing on the opportunity. \u00a0Starting several years earlier would have meant failure due to customer acquisition costs – shopping aggregators like Froogle leveled the playing field. \u00a0<\/span><\/p>\nStarting several years later would have also been fatal as the aggregators gave way to pay-to-play solutions. \u00a0The marketplace became divided again, but this time between highly fractured services like eBay that allow strong seller control and focussed marketplaces like Amazon that limited seller flexibility.<\/span><\/p>\nLooking to improve prior to the next effort, there were those two things outside my control that I wanted to address. \u00a0First, the cost of goods sold was too high. With average margins hovering at 30%, failure during a single sale could take three or four successful sales just to break even. \u00a0With lower cost products, my ability to replace mis-delivered items or eat the loss from a customer complaint improved my options for increased customer satisfaction.<\/span><\/p>\nThe second item to improve upon is gaining better control over all logistics surrounding the sales process. \u00a0True, the automation gave better visibility to the process and allowed everyone to react to changes more quickly. \u00a0The problem is that I was doing just that – reacting. With more distribution control, I could be confident of inventory counts, be able to stock up in advance of peak periods, and staff up as needed to deliver all queued orders.<\/span><\/p>\nAs my textbook sales wound down, my next effort improved on both these goals.<\/span><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Automating the marketing, sales, and logistics for a textbook drop-shipping juggernaut.<\/p>\n","protected":false},"author":1,"featured_media":87,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/posts\/85"}],"collection":[{"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/comments?post=85"}],"version-history":[{"count":23,"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/posts\/85\/revisions"}],"predecessor-version":[{"id":161,"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/posts\/85\/revisions\/161"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/media\/87"}],"wp:attachment":[{"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/media?parent=85"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/categories?post=85"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keith.resar.org\/blog\/wp-json\/wp\/v2\/tags?post=85"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/keith.resar.org\/blog\/wp-content\/uploads\/2018\/10\/keith.resar_.org-blog-What-is-an-ISE-Textbook.jpg\")
<\/p>\n