Case Study Design Sklad & Scallium: How to launch a furniture marketplace

This is the story of our client, furniture marketplace Design Sklad, which started 7 years ago in St. Petersburg as a store selling designer furniture.

The online store was doing well, but limited inventory prevented them from scaling. Customers needed more choice. If they want a green upholstered chair with golden legs, they have to get it. On the other hand, it was not possible to cover the entire client need only with the help of the shop's import.

So the shop began to transform into a marketplace to enable suppliers to bring their goods to the showcase. Thus, they planned to increase the assortment, and, consequently, the conversion into purchases.

Attempt #1. marketplace without automation

At first, the store management tried to make the marketplace on their own, handling all the processes manually. They loaded the suppliers' goods by themselves, processed each application from buyers, and gave the merchants a ready-made track number for delivery.

There were many difficulties, among which 3 were critical:

First, It was difficult to work with someone else's assortment. Suppliers sent their catalogs and price lists in different formats: some in pdf, others in Excel; someone uploaded documents to Google Disk and someone sent them by mail.

Second. Suppliers did not specify the characteristics that the store needs. Those characteristics the business considers significant, based on experience with its client. Some merchants generally had incomplete goods descriptions.
A product card example in the Scallium platform
The third difficulty arose with delivery. When the shop was shipping orders by themselves, they made sure the goods were packed optimally and took up less space during delivery. But suppliers, as it turned out, do not think about the package at all. They packed the goods somehow, and the package size could exceed the product size by 2 times. This fact led to a large cost overrun on logistics. The shop spent a lot of money to pay for the logistic services, which considers the weight and size characteristics of the packaging, and not its actual product size.

As a result, the number of employees and operating costs grew rapidly. Each supplier had to be assigned a manager who would delve into his assortment and all the nuances of working with this seller.

The business managers realized that they need to look for another way.

Attempt #2. Supplier's account as a separate module to the CMS

Next, this store tried using a marketplace solution on a popular e-commerce platform. For a month, they tried to run through this solution all the processes that they did manually. They expected they would at least partially automate the work with merchants. But they faced with the fact that the mere presence of the seller's account in the form of a module written next to a CMS, does not help in any way.

The first difficulty is the limitation on the number of goods. With such a solution, it was difficult to work with a catalog with more than 10,000 SKUs.

The second problem is working with the database inside the e-commerce platform. They could upload 10K products with only size, weight and photo in the characteristics. They needed more characteristics, so the database slowed down a lot. And the website of the online store also was slow. Accordingly, customers received a negative experience.

Attempt #3 An Advanced Back-office platform for marketplaces Scallium

So the client came to us, the Scallium platform development team. At this point, the client has already formed clear goals for automation:
Transfer part of the operating system to merchants: work with the catalog, delivery, order processing;
Optimize the cost part in such a way that overhead costs grow more slowly than the business margin;
Simplify the routine for merchants with the shipment of goods.
The Scallium platform automated the processes of working with merchants, product range, orders and billing. To achieve the goals above, the online store needed to integrate the marketplace solution with the existing storefront, Retail CRM and the logistics operator DPD.
Scheme how Scallium integrates with other office systems
Working manually, the client spent a lot of resources on adopting the supplier's knowledge, structuring it, and then transmitting it to the buyer. Now, thanks to the Scallium back-office platform, we can focus on creating rules by which suppliers themselves broadcast knowledge about their products to buyers.

By automating the processes, the client was able to immediately increase the assortment from 2000-3000 SKU to 50,000 SKU, while still not significantly increasing the number of suppliers. Attracting new sellers is the next stage in the development of the Design Sklad marketplace.

We try to simplify the merchants' life as much as possible. One of the examples of how we have simplified their work with the logistics service - when creating an order, the system automatically generates a pre-filled application for delivery and the dimensions of this delivery. As a result, the process is accelerated, and the merchant has less manual work. There are many such nuances. We try to constantly receive feedback from suppliers on working with the system, and we develop further functionality based on the information received from them.
Scheme how furniture marketplace works with Scallium
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