SHOPSTER.COM

BY-Dinesh SharmaSachin Shandil

Sameer NarangSaurabh Singhal

Digvijay GargSahil Vinayak

IntroductionShopster was founded in 2004 by a couple of

young tech entrepreneurs in Calgary, Canada. It has customers in over 22 countries and offices

in the United States and CanadaIt has provided a full business solution that

enables companies to either start or expand their online business.

Shopster developed a marketplace for sellers and dropship suppliers to connect with each other, do business with each other.

IntroductionShopster's Social eCommerce

Network, which is available to all Shopster members, is a one-of-a-kind network for dropship suppliers and sellers to connect.

By enabling these connections, dropshippers instantly enjoy mass distribution of their product lines, while sellers have a source of products from which they can sell and make profits.

IntroductionWhat Shopster has to say ?

Connect with 85,000+ online retailers and dropship suppliers.-The Shopster Network is the largest of its kind, connecting retailers with product, suppliers and allowing for the most effective way to do business online.

Find Dropship Products to Sell- Shopster makes available an inventory of over 850,000 products from which clients ( virtual retailers) select for their new Shopster storefront.

Introduction

What Shopster has to say ?...

List your Products on the Shopster eCommerce Network

If you have products for sale, list them on the Shopster Network and have other retailers sell them for you. Set a price that other Shopster retailers would pay you for your products. When a sale of your product is made, you will receive payment from the retailer then you ship the product to the retailer’s customer.

Customer Service

Shopster Business Model

Shopster remits profit to Rstore

owner.

Shopster sends payment to

supplier

Supplier ships pdt direct to

shopper

Shopster submits PO to

supplier

Shopster informs owner

Online shopper makes

purchase at Rstore websites

Rstore owner accesses sales information from the website

The Shopster advantageThe attractiveness of this business model

is that it provided all of the e-commerce, product fulfillment and customer service functions at minimal costs.

Own Online business more than $13,000 but only $329.99 through Shopster (exhibit 6 )

The aspiring online retailer did not need to know how to-set up a website, deal with orders or payments or manage shipping or manage inventory.

Shopster retailers are responsible for marketing their own stores although Shopster ensured that client’s website was optimized for search engine visibility.

Expanding the Customer Base Use of Affiliate Marketing : Involved other retailers , existing clients An amount of $ 60, to affiliate, for

registration on shopster.com by the visitor of affiliate website.

Shopster to pay a lifetime commission of $60 for every new subscription.

Clients got an amount(A Second tier commission) of $12 for each referral and shopster subscription.

Ran Sharesale.com, to improve its affiliate network.

Encouraged online retailers to be Shopster’s client and gave them opportunity to expand their product line .

Copied the look of websites of retailers and add their inventories in its warehouse on the request of retailers.

Added store within any high traffic site to spread the Info.

Attracted webmasters to advertise Shopster by linking to other online retailers , to reach the potential customers.

Increase in SuppliersEarlier sales was conducted over telephone or

mail.Websites were not upto full scale retail sales

capability.Provided a handy sales outlet – artisans,

painters, sculptors hobbyists. People could directly place their order and

other suppliers could also participate.Increased artisan’s sales prospect to sale other

retailers of shopster.

Manufacturers could be a part of Shopster and list their product, which resulted an expending and attracting no. of offerings.

Costs of Starting and Staying in Business Online

On your own (Average Annual Cost based on sales $2000 pm

Shopster Annual Subscription

Start up Fees

One Time Annual Fee NA $ 329.99

Business License $100 Not Required

Merchant account for credit card payments $3360 Included

Security – The SSL Certification $500 Included

Hosting $500 Included

Telephone line $600 1 – 800 Service includes

Managing Inventory

Data Needs $400 Included

Inventory Updates $1200 Included

Exclusive Supplier Setup Fees and Data $1000 Included (120 + suppliers)

Customer Transactions (Labour only)

Telephone calls and emails $2000 Included

Order Processing $1440 Included

Fraud Control $480 Included

Dispute Resolution $480 Included

Product Returns 600 Included

Total Cost $13260 $329.99

Drop Shipping Majority of Shopster products could be sold

on auction sites (e.g. eBay, Yahoo) through Drop Shipping .

Client retailers could choose the product from Shopster website.

Received order is sent from auction site to Shopster and, finally supplier would make an shipping facility directly to the customer.

Posting items became much easier using eBay Turbo Lister .

Value Addition Shopster selected carriers based on : Minimum carrier cost Strong consideration of Delivery time. Shopster used a shipping table ,same price

for shipping anywhere in U.S.

Reports and Sales Tracking Inventory Report : Shopster to report on product details i.e.

total sales, product returns, profit earned. Clients could see visitors and traffiic data.

Client was emaild when sale was made, and informed about the types of sales/customers.

The TechnologyThe Shopster business relied heavily on

communications systems.Shopster guaranteed 99.8 % uptime for its servers.Multiple power source back ups and advanced

security monitoring.Shopster channeled its transactions through a

secure payment system, Secure2u, a Shopster company.

Addressing a common concern of many shoppers about surrendering credit card information, Shopster used the industry standard 128 bit data encryption system to ensure that personal information was secure and safe.

Start Up Trio -Matt Cox, Michael

Barrette, Sarath SamarasekeraBy August, 2004 business plan was readyMutual relationship between buyers and sellersEnable people to find things they can’t find in any

other way.

Pulling of all vendors at a single place- Mall FormatConnections between Internet retail store starters and

suppliersAccess to vast inventory to Internet RetailersDisplay of goods of suppliers and manufacturersSelling of goods at lower prices

What Shopster would Offer

Existence of YahooAttracting investors

a) Dot-com bust

b) Oil boomMore number of shareholdersPersuading suppliers to become partnersSigning up of new retailersFailure of Beta testing in its first attemptSelling the product that was not the

cheapest

Challenges Ahead….

Generation of revenues on regular basisBy early December, system was collapsed due to

problem of LOAD HANDLINGResuming of full operations in January 2006Successful changing of pricing strategy

Launch

ManagementAt the University of Calgary, Samarasekera was the

president of the students union and a member of the university’s board of governors, senate and university’s budget and finance committee

After receiving a degree in bachelor of commerce he worked as an analyst with Trilogy International. He then became a part of the management team and helped the company grow.

This work brought him into contact with a number of Fortune 500 people. His areas included project management, technology strategy, technology infrastructure and implementation.

In 2001, he joined the London School of Economics and completed his master’s program in economics in the year 2003. During this time, he was also acting as the managing director of Samaradeen Group.

The other partner, Michael Barrette, was also in the University of Calgary in the finance program.

He devoted his time in refining the Shopster business model. Barrette was appointed president of marketing strategy, but he left the company in December 2006.

CompetitionShopster had no full service competitors.

DropShipDesign, UsellCorp, Turnkeybuilders, Shopify, Yahoo Merchant Solutions were among some of the competitiors. These were invovled in building Internet Retail Websites.

Among the main competitors were GetEstore.Shopster had some advantage over competitors. Switching cost for the clients was too high.Shopster had the experience with them.The competitors needed time and efforts to

duplicate the things achieved by Shopster.It had a large community of suppliers and retailers

Current challengesThey are facing both technical and operational

challenges.Having complex revenue modelSamarasekera pointed out that shopster was

still dealing with smaller investorsSupply chain managementBranding which was both marketing matter and

technical matter.

Current challenges….Retailers made variety of different requests

for web enhancementsFinding the right management team in

calgaryRelocating part of business to the USCanadian banking systemHigh packages expected by technical staff.

Thank you