By Ciani Welch
How can a start-up compete against established industry titans like eBay and Walmart? Like the fabled tale of David and Goliath, entrepreneurs challenge the status quo daily in their pursuit of innovation. By instituting a new payment technology, New Jersey-based wholesale distributor 888 Lots quietly conquered the supply chain while the most celebrated online marketplaces of our time looked the other way.
One of the biggest mistakes established companies make is allowing themselves to believe that their way of doing things is the best and only way. Most companies are well aware of numerous points of inefficiency in their processes and countless pain points throughout their customer experience, yet they convince themselves that nobody else could do it better. When companies settle into complacency they leave themselves vulnerable to disruption. An outsider can come along and challenge a business’s paradigms, exploiting their blind spots and changing the game overnight.
888 Lots (888lots.com) identified an opportunity to grow their business where the likes of Amazon, Walmart, eBay, and Jet.com were under delivering. These retail goliaths were so committed to delivering exceptional products and value to their end customers that they overlooked some of the needs of the resellers, who actually fill the critical role of bringing those exceptional products to market. “These companies created a new marketplace universe where resellers can easily connect with buyers like never before. With that came tremendous logistical challenges that also never existed before,” says Albert Palacci, CEO of 888 Lots. “Most small, regional resellers did not have the supply chain expertise to be able to deliver at the scale the modern digital marketplace makes possible.”
In recognizing this gap, 888 Lots identified a way they could complement each marketplace’s offerings, capitalizing on their growth without competing directly with them. 888 moved quickly to begin offering end-to-end distribution services to its existing wholesale clientele and has seen revenues triple. By staying ahead of their customers’ emerging needs and expanding to fill a void, they cemented customer loyalty and multiplied the size of their business opportunity.
Owning a Winning Strategy
Whether your company is big or small, it is always important to stay focused. No company can afford to fall into the trap of trying to be everything to everyone in their pursuit of innovation. At the same time, you must constantly push the envelope in identifying your next opportunity for breakthrough revenue growth.
In 888 Lots’ case, that meant taking their offering to the next level. Rather than trying to expand into new product lines, they focused on making their end-to-end reseller services even more valuable. “I realized that there was a four to six week window between when my customers needed to pay me for their products and supply chain services, and when they collected their receivables for goods sold to consumers. This cash flow gap was a serious hardship for them and it prevented them from scaling their businesses,” Palacci states.
Palacci introduced an innovative payment solution in 2015, which provided the on-demand cash flow his customers needed. He integrated Behalf®, a provider of instant business credit, into his e-commerce workflow so that his retail customers would receive an option to pay with flexible terms. “When my customers received the ability to customize their own payment plan and take up to six months to pay, my sales immediately increased,” says Palacci. The Behalf® line of credit was a win/win for Palacci and his customers, as Behalf® effectively increased his reseller customers’ working capital. Many of Palacci’s customers are now among the most productive resellers on Amazon and eBay, thanks in part to his focus on helping them scale.
Putting a Customer First Strategy to Work for You
As 888 Lots’ success proves, it is hard to fail when you stay laser focused on satisfying your customers’ needs. An assessment of their needs may expose a gap in your product line, a need for a new partnership, or demand for a new location. The one thing you can count on is that your customers’ needs are ever changing and if you do not stay ahead of these changes, someone else will. Make sure your annual plan includes research and, at the very least, ongoing customer satisfaction surveys to pinpoint those opportunities.