DropShip Commerce Adds $4.3M, Looks to Be Turnkey Inventory Management Solution

Today, Salt Lake City, UT-based DropShip Commerce, a SaaS platform focused on virtual supply chain management, announced this week that it raised a $4.3 million funding round, with $2.8 million contributed by co-founders Jeremy Hanks and Blaine Nielsen and the remaining $1.5 million led by Kickstart Seed Fund and other investors. According to Hanks, the funding will primarily be used to add development talent to the team.

Prior to starting DropShip, the leadership team founded and ran Doba, a drop shipping resource targeted at wholesalers, where it integrated with 500 vendors and 10 million individual products. The duo decided to found DropShip after recognizing that the market opportunity was in the mid-sized tier of both manufacturers and retailers.

“We started Doba in 2002, did that for 10 years, and lived the front line challenge that there isn’t really a good way…[to manage] the endless aisle of inventory-free retail work,” Hanks said in an interview with BetaKit. “Over the year we integrated with 500 vendors, distributors, and manufacturers…and ran into a lot of technical problems, so we said there’s a bigger opportunity, the trends are still early.”

Drop shipping is a supply chain management technique that refers to retailers, both offline and online, who do not keep any inventory on hand, but instead take orders via a catalogue or website and have the manufacturer or wholesaler ship directly to the end consumer. With the growth of ecommerce, DropShip Commerce looks to serve both sides of the equation and helps retailers and manufacturers integrate and manage all of their product with a product merchandise catalogue, inventory management dashboard, and real-time order data. In doing so the company looks to streamline operations while allowing its users to focus more on their marketing efforts to add more sales volume and fulfill more orders.

Customers pay an annual fee to access the platform, which ranges based on the number of features they want to use. “It’s kind of a little bit of like Salesforce, we have an integration automation platform over on top of a data standard we help co-develop. You then as our customer integrate to that and that allows you to get access to the other tools and integration points for your trading partners so you don’t have to build one-to-one connections,” Hank added.

Hanks said the company’s target market is mid-sized businesses with revenues ranging anywhere from $2 million all the way up to $250 million, so their main competitors are individual IT departments that are already trying to solve the problem through an in-house solution. In terms of competitors, in the past BetaKit has covered startups like TradeGecko which are focused on smaller online retailers, with others like Stitch Labs looking to target more boutique online designers.

The company’s goal for 2013 is to open up its API and recruit third-party developers to build apps for the platform, which its user base will be able to access as add-on solutions. It also plans on allowing retailers to create white-label vendor portals, while allowing potential customers with existing software to tap into its backend technology to simply integrate better with existing partners. Given the need for cost-effective inventory management solutions in the small-to-mid-sized retail environment, the funding and several years of experience in the industry should help DropShip make it easier for retailers and manufacturers to manage their supply chain.


Humayun Khan

Humayun Khan is a Senior Writer and Analyst at BetaKit. A marketing graduate with honors, Humayun's work experience spans the fields of consumer behaviour with noted contributions in an academic paper published in the Journal of Consumer Psychology and market research consulting having coordinated projects for a major financial services client at Decode Inc. More recently he was involved in business strategy as a Business Analyst for an equipment rental outlet and prior in the National Marketing Department at Ernst & Young LLP. He is passionate about emerging and disrupting technology and its ability to transform and create entirely new industries.

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