A brand asked me today a few questions about the Bridge. My response is below.
How will the brand make more money with the Bridge? 1) A brand makes money by making more online sales via retailers' websites. Instead of a retailer having few items from a brand for sale on its site, the retailer will have 100s or 1,000s. The home goods industry is very reliant on bridal and gift registries. If a brand is not on a retailer's website, it's not on the bridal registry, and sales are missed. Bridge items can be sold via registries.
2) The brand also saves money by saving labor costs. Specifically, employees will spend less time sending CDs (and emails) with images and product data to retailers.
3) There is a lot of discounting of merchandise on the Internet. The Bridge reduces this by helping pushing gray marketers off the first page of Google results. For foreign brands, most gray market items are trans-shipped from overseas, such as Europe, to the U.S. As such, U.S. distributors are not making the discounted sale to the order placed in New Jersey but rather a retailer in, for example, Berlin. Stopping discounting gives the order back to the local retailer, who sources it from the U.S. distributor, thereby increasing sales for it.
How will a sale be made? 1. The consumer purchases the item on the retailer's site. The consumer's money is transferred to the retailer's bank account. The retailer receives notification about this order via e-mail.
2. The retailer looks at its inventory. If it has the item in stock, it ships what it has in stock. If the item is not in stock, which is likely when carrying 1,000 of items on a website, the retailer will place an order for the item with the brand. The brand in turn gets paid.
Does the brand drop ship? If the brand drop ships, then a retailer will likely ask the brand to drop ship a Bridge order. If the brand does not drop ship, then the brand will mail the item to the customer, and then the reteailer will mail it to the customer. With this model, the retailer charges enough to cover both shipping costs.
Does the brand require minimum orders from retailers? If the brand has a minimum order requirement and the retailer has a Bridge order in hand, it will likely first assess if the order is over the minimun or not. If it's over, the retailer places the order as a drop ship. If the order is under the minimum, the retailer may decided if there is additional product it would like to order. It may order product to fulfill the order as well as stock the store in order to meet the minimun requirement.