Scandibørn
How Scandiborn Became a Leading Children’s Ecommerce Retailer Without Inventory
“We’re not doing any more wholesale. It’s too much of a liability to speed and on our balance sheet.”
Overview
About
Scandibørn
200+
Brands Onboarded
8
Categories Expanded
0
Inventory Investment
Scandibørn offers Scandinavian-inspired children's design, decor, essentials, toys, accessories and more, perfectly suited to meet the needs of busy modern lifestyles. They are a one stop shopping destination for eco conscious pieces in captivating designs, all with a fun, Nordic spirit. From pregnancy essentials, beautiful babywares, wooden toys and stunning home interiors, they’ve brought together a trusted community of carefully sourced unique brands and artisans.
The Goal
Reduce liability and increase customer loyalty by going 100% dropship
Scandiborn was founded on a common ecommerce model in which they’d purchase and manage the inventory behind the products for sale on their website. Filling a much needed gap in Scandinavian inspired nursery decor, Scandiborn instantly found relevance and built a strong base of loyal customers.
For Scandiborn, maintaining loyalty in the crowded children’s ecommerce market meant a continuous stream of new and exciting brands was always available on the website. But with cash and staff focused on purchasing, warehousing and fulfilling orders from inventory, they lacked the capacity to continue differentiating and increase customer relevance.
Relevance, as Scandiborn soon found out, can be fleeting.
The Challenge
Reduce working capital and staff tied up in buying and managing inventory
When compared to dropshipping, buying and selling wholesale inventory offers higher margins for retailers. In Scandiborn’s case, owned inventory impacted their ability to quickly adapt to changing consumer preferences and represented a risk to overall margins when inventory buys were misforecasted - an increasingly common problem for retailers in the face of rapidly changing consumer preferences.
“Any deal we’re currently working on is solely dependent on dropship, it’s that serious” Gabrielle Greenberg - Director of Marketplace · Scandibørn
Rising labor costs further impacted margin, while inflation pushed the risk of carrying inventory even higher.
As a fast growing ecommerce retailer, the team at Scandiborn knew they could make the difference in margin between wholesale and dropship fulfillment irrelevant with an increase in total sales. Now, they needed a solution to automate the program.
“Any deal we’re currently working on is solely dependent on dropship, it’s that serious”
The Solution
Migrate to 100% virtual inventory, fulfilled by rapid growth in brand assortment
With margins shifting back into favor of their vendors and distributors, Scandiborn had little trouble refactoring existing vendor relationships to dropship - even with their largest suppliers. In search of increasing customer relevance however, Scandiborn turned their attention to onboarding new suppliers.
“We would like to offer every relevant category with at least a handful of quality products in each, appealing to an increasingly wider age range as our customer’s children get older.”
With Modern Dropship's automation, Scandiborn onboards five new brands per week with an average onboarding time measured in hours. When new brands need help troubleshooting while onboarding or for order issues, it’s Modern Dropship's team that steps in - not Scandiborn’s, leading to a 90% onboarding success rate. With Modern Dropship, Scandiborn can rapidly fill gaps in categories, styles, price points and more without needing to hire additional buyers, merchandisers or operations staff.
“If it was manual we’d need a full team running operations and dropship specific customer service staff. The team would need to be at least triple the size. So much of the vendor work I'd normally take on is handled by your engineering and support teams.”
“We would like to offer every relevant category with at least a handful of quality products in each, appealing to an increasingly wider age range as our customer’s children get older.”
The Results
Increased customer relevance across every measurable ecommerce KPI
Since launching their dropship program on Modern Dropship, Scandiborn has seen positive momentum across every measurable ecommerce KPI, including:
- Average Order Value (AOV): Aware of the fact that their customers comparison shop on multiple sites, Scandiborn found they could increase AOV by offering more of what their customers were looking for. If they have all five items in consideration, but their competitors have one or two, they’ll place the full order with Scandiborn to avoid multiple checkout processes.
- Customer Acquisition Costs (CAC): With over 200 brands added this year, Scandiborn lowered customer acquisition costs as organic search for branded terms reduced their need for paid advertising.
- Customer Lifetime Value (CLV): While an expanded assortment provides reasons to return to Scandiborn’s site more often, they’re also focusing on increasing CLV: "We want people to come to our site and buy anything and everything from nursing all the way until their kids are 12 years old. Modern Dropship allows extend the ages we serve with ease”
- Time on Site: An always fresh assortment means Scandiborn site visitors spend more time discovering new categories, brands and products on the site. Their next challenge is to focus on how they can drive a customer through their site instead of to the site.
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