The advantages of such services for a company like HSN include not only extending the efficiencies that come with EDI to the company's supply base, but also reducing the time and effort necessary to connect to a large number of suppliers. Similarly, for the smaller company involved, the advantages include the ability to do business with much bigger partners while also avoiding the need for a large IT staff, not to mention the cost of setting up individual EDI connections with different customers.
Various such services exist, and HSN has established links with several of them, including providers that could perform fulfillment for the supplier in addition to acting as an EDI intermediary. When HSN needs to on-board a new supplier that is not EDI-ready, the shopping network points the other company in the direction of several of the services and lets the supplier decide what provider offers the model that best meets the supplier's own needs. In the case of David's Cookies, the baker elected to go with a New York City-based third-party service provider called Mercury Commerce, which offers a service called VendorBridge.
VendorBridge worked best for David's Cookies for a few reasons, according to Tress. First, the cookie company had its own fulfillment capabilities, so it did not require the more expansive services offered by some of the other third-party providers. Second, David's Cookies used UPS for all its shipping, and Mercury Commerce was able to provide shipping information to David's in a file that could be imported directly into a UPS application. And finally, Mercury Commerce's solution is entirely Web-based, with no software to install at David's Cookies and no upfront cost to the cookie company for the initial set-up.
Tress works with a staff of two others at the cookie company, and his team is able to go online to the VendorBridge Web site once daily to pull down all the orders that have come in that day to HSN for David's. The staff then prints out the orders for packing slips, loads the data into the UPS system and prints the UPS labels. Tress' team passes the orders off to a pair of employees in fulfillment on those days when the orders only number in the dozens. When HSN features David's Cookies on one of its television shows, typically generating thousands of orders, the company ships the orders off a production line in the back of the business.
When the orders go out the door, David's Cookies sends a confirmation of shipping, along with tracking numbers, back through VendorBridge to HSN, which receives the message as an EDI shipping confirmation. That confirmation also triggers the payment process at HSN. Should any product be returned to David's, the cookie company notifies HSN through VendorBridge as well.
Finding the Right Cookie Mix
Both Weber and Tress agree that using a third-party EDI service provider has been largely without challenges, technical or otherwise, to the extent that, in separate interviews, both described the connection process as "straightforward." Good thing, too, since David's Cookies believes that the retail side of its business will be expanding the company already has signed on to sell product through Macy's Web site, also using VendorBridge, and it has signed up with Amazon.com, which will require using Amazon's own site to pull down order information.
Tress acknowledges that as David's Cookies network of distribution channels continues to expand, it could be a challenge to meet a host of different connection requirements imposed by different customers, although as of yet that is not a problem that keeps Tress up at night, he says.
For HSN's part, Weber says the company sees drop-ship continuing to be an important component of the company's overall fulfillment process, but not necessarily a growing component. "We're really at a good mix of drop-ship versus HSN fulfillment," he says.