Digital River Inc. has introduced a new e-commerce platform designed to optimize the online sales of limited-edition and clearance merchandise for manufacturers.
“Companies are looking for additional sources of revenue,” said Matt Voda, group VP and product manager at Digital River. As a result, the traditional scenario that saw manufacturers liquidating left over inventory through a third-party isn’t as appealing as it once was.
“Rather than liquidating the merchandise for pennies on the dollar, companies are realizing they can reach out to new customers directly and make more money,” Voda explained.
Seagate, a large manufacturer of computer hard drives, started using Digital River’s Limited Edition service during the beta rollout to run an outlet store from its Web site at Seagate.com. “They’re taking end-of-life products where they have too few items to do a big liquidation and producing significant sales volume through the outlet center,” said Voda.
Using the solution’s social networking tools to promote the discounted items, Seagate is able to pick up new customers, Voda continued. And because these are discontinued items, the manufacturer can promote them without having to worry about any channel conflict with retailers.
Consumer electronics manufacturers are expected to be a strong vertical for the platform because the business has consolidated into the hands of several large retailers as others have gone out of business, Voda said. This leaves manufacturers with fewer opportunities to sell in their merchandise.
Several things make the platform different from a typical e-commerce service, Voda noted. These include additional architecture to handle the high peaks of demand around special discounts; safeguards to prevent products from being oversold, since many are discontinued items, and additional logic to look at inventory across multiple warehouses so that inventory can be most efficiently routed to customers.
