SHOPSTER.

COM

BYDinesh Sharma Sachin Shandil Sameer Narang Saurabh Singhal Digvijay Garg Sahil Vinayak

Introduction
y Shopster was founded in 2004 by a couple of young tech entrepreneurs in Calgary, Canada. y It has customers in over 22 countries and offices in the United States and Canada y It has provided a full business solution that enables companies to either start or expand their online business. y Shopster developed a marketplace for sellers and dropship suppliers to connect with each other, do business with each other.

Introduction
y Shopster's Social eCommerce Network, which is available to all Shopster members, is a one-ofa-kind network for dropship suppliers and sellers to connect. y 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.

Introduction
y What Shopster has to say ? y 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. y 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
y What Shopster has to say ?...
y List your Products on the Shopster

eCommerce Network

y 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

Online shopper makes purchase at Rstore websites Shopster informs owner

Shopster submits PO to supplier

Supplier ships pdt direct to shopper Rstore owner accesses sales information from the website

Shopster sends payment to supplier

Shopster remits profit to Rstore owner.

The Shopster advantage

y The attractiveness of this business model is

that it provided all of the e-commerce, product fulfillment and customer service functions at minimal costs. only $329.99 through Shopster (exhibit 6 )

y Own Online business more than $13,000 but y 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. retailers are responsible for marketing their own stores although Shopster ensured that client s website was optimized for search engine visibility.

y Shopster

Expanding the Customer Base

y 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 Suppliers
y Earlier sales was conducted over telephone or mail. y Websites were not upto full scale retail sales

capability. y Provided a handy sales outlet artisans, painters, sculptors hobbyists. y People could directly place their order and other suppliers could also participate. y Increased artisan s sales prospect to sale other retailers of shopster.
y 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 Start up Fees One Time Annual Fee Business License Merchant account for credit card payments Security The SSL Certification Hosting Telephone line Managing Inventory Data Needs Inventory Updates Exclusive Supplier Setup Fees and Data Customer Transactions (Labour only) Telephone calls and emails Order Processing Fraud Control Dispute Resolution Product Returns Total Cost

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

Shopster Annual Subscription

NA $100 $3360 $500 $500 $600

$ 329.99 Not Required Included Included Included 1 800 Service includes

$400 $1200 $1000

Included Included Included (120 + suppliers)

$2000 $1440 $480 $480 600 $13260

Included Included Included Included Included $329.99

Drop Shipping
y Majority of Shopster products could be sold on auction

sites (e.g. eBay, Yahoo) through Drop Shipping . y Client retailers could choose the product from Shopster website. y Received order is sent from auction site to Shopster and, finally supplier would make an shipping facility directly to the customer. y Posting items became much easier using eBay Turbo Lister .

Value Addition
y 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

y 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 Technology
y The Shopster business relied heavily on communications systems. y Shopster guaranteed 99.8 % uptime for its servers. y Multiple power source back ups and advanced security monitoring. y Shopster channeled its transactions through a secure payment system, Secure2u, a Shopster company. y 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
y Trio -Matt Cox, Michael

Barrette, Sarath Samarasekera y By August, 2004 business plan was ready y Mutual relationship between buyers and sellers y Enable people to find things they cant find in any other way.

What Shopster would Offer

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

suppliers y Access to vast inventory to Internet Retailers y Display of goods of suppliers and manufacturers y Selling of goods at lower prices

Challenges Ahead.
y Existence of Yahoo y Attracting investors

a) Dot-com bust b) Oil boom y More number of shareholders y Persuading suppliers to become partners y Signing up of new retailers y Failure of Beta testing in its first attempt y Selling the product that was not the cheapest

Launch
y Generation of revenues on regular basis y By early December, system was collapsed due to

problem of LOAD HANDLING y Resuming of full operations in January 2006 y Successful changing of pricing strategy

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

y The other partner, Michael Barrette, was also in the University

of Calgary in the finance program. y 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.

Competition
y Shopster had no full service competitors. DropShipDesign,

y y y y y y

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 challenges
y They are facing both technical and operational challenges. y Having complex revenue model y Samarasekera pointed out that shopster was still dealing with smaller investors y Supply chain management y Branding which was both marketing matter and technical matter.

Current challenges .
y Retailers made variety of different requests for web y y y y

enhancements Finding the right management team in calgary Relocating part of business to the US Canadian banking system High packages expected by technical staff.

Thank you