UPDATE 30 May 2017: HubLogix have been acquired by ChannelAdvisor and is now known as ChannelAdvisor Fulfillment.
I’ve been covering inventory and marketplace management tools for over ten years. It’s rare that I come across software that does something different to the rest.
But recently I discovered a product called HubLogix. It provides the typical features you find in this type of software – inventory management, integration with popular stores and marketplaces, shipment tracking, and so on. Those are great features, but not unique.
What is unique about HubLogix is that they are integrated with thousands, yes thousands, of suppliers. By that I mean manufacturers, wholesalers, dropshippers and other “vendors”, as they call them. I’ve not seen any others in this industry tackle the problem of supplier integration with anything like the scale or depth offered by HubLogix.
In this article, I’ll tell you a lot more about HubLogix and how they tackle the problem of supplier integration and automation.
Why is this a big deal?
For many businesses, ecommerce is all about integration and automation.
But integrating and automating what?
Well, every seller has suppliers. Whether they are traditional retailers, distributors, or even crafters, everyone needs to purchase inventory. Every seller has sales channels, ranging from a single online store, to multiple international stores and marketplaces. And every seller needs to fulfill orders. Some do it all themselves, and others use a combination of fulfillment services, dropshipping, in-house fulfillment, and multiple parcel carriers.
So it can be simple to sell online – if you have one supplier, one sales channel, and one way of shipping orders. It can also be extremely complex, with dozens of different suppliers, sales channels, and fulfillment options.
There are plenty of software tools for managing stores, marketplaces and orders, but most don’t try to automate the purchasing of inventory. Whether it’s to replenish stock or to dropship a single product, purchasing is usually a manual process.
Vendor integration is the last mile in ecommerce automation. If it too can be automated, there’s very little admin left to deal with. A business that automates sales channels, shipping and purchasing can put a lot more energy into growth, through better sourcing and marketing, and additional sales channels.
From Schoolyard Trader to Software Startup
HubLogix’s founder, Kurt Heinrich, started a business selling iPod accessories at the age of 13. At first he sold hand-built novelty iPod chargers to school friends, then progressed to importing phone accessories and reselling them online.
Before long, the amount of time spent handling orders became unmanageable, so Heinrich moved onto dropshipping. Dropshipping moves the burden of order fulfillment to the supplier, but profit margins are lower, and the admin of forwarding orders and maintaining inventory levels remains. But if that too can be automated, a very low-overhead and scalable business becomes possible.
Heinrich created his own software to provide that automation. It wasn’t until about ten years later, when those problems had become more common, that he started building out the software to be used by others. That software became HubLogix. It grew out of Heinrich’s experience with dropshipping, and the software he created to automate his business.
So from the very beginning, HubLogix was designed to integrate suppliers as well as shippers and sales channels. Without that, a manual process remains, and the software can’t claim to be a complete automation solution.
The story of Heinrich’s early ecommerce business is documented in a detailed answer to the Quora question “What are some low-cost businesses that can be started by a teenager?”
Vendor Automation: A Problem Worth Tackling
Ecommerce is a buzzing industry, still growing and evolving quickly twenty years after Amazon was founded. But the number of popular marketplaces and storefront tech providers is not all that high – in the tens rather than hundreds. It’s certainly a challenge to create and maintain software integrations with all those channels, but one that several companies have been able to meet.
The business of manufacturing and wholesale is something completely different. Although suppliers’ technology has improved, the industry is as old as business itself, and it has changed at a much slower pace. There are so many suppliers – millions, certainly – that their number can only be estimated rather than accurately counted. It’s no wonder most companies shy away from the problem.
So how have HubLogix managed to integrate thousands of vendors? Even though I have a background in software development myself, I was expecting some kind of magical solution. But it’s much simpler, and harder, than that:
Nate Kristy, HubLogix’s Director of Marketing, explained:
At the end of the day there’s probably eight, ten, maybe a dozen different data formats that vendors are using. For the first couple of years we developed the technology so that when new vendors come on board we have a way to capture the data, normalize it, and use it properly. That was a big investment on our part. Now a large percentage of our organization is dedicated to the technology side, handling integrations with vendors every time a new retailer client comes on.
So they approached the problem the same way software technology is used to tackle any problem – by breaking it down, identifying common factors, designing software, and creating processes. Then testing, repeating, and plugging away until it “just works”. It’s hard, and takes great skill in technology and management. But it never happens without taking that first step – deciding it’s a problem that you’re going to try to resolve.
What Happens When a New Seller Signs Up?
Even though so many vendors are already integrated, it’s normal for new retailers starting on HubLogix to use suppliers that are not already on the platform. The way new suppliers are added depends on the pricing level – HubLogix has two fixed-price plans and a custom-priced enterprise plan.
At the Platform price level of $99 per month for up to 100 orders, HubLogix will make sure the seller’s biggest supplier is integrated for no additional fee. After that, there is a self-service integration wizard that can be used to configure other vendors. Custom work is available for sellers on the Platform plan, for an additional fee.
At the Platform Plus price level of $499 per month for up to 1,000 orders, HubLogix does all the vendor integrations as part of the launch with no additional fee.
Nate Kristy again:
We are now getting retailers coming to us saying, “Hey, I understand a fellow retailer who uses this vendor is using you to accelerate their operations. I’m interested in how I can tap into that myself.” We have integrations with thousands of vendors, and we’re adding more every day. It’s very common for someone to have one that we have not seen before, but we’re starting to reach a lot of commonality amongst our clients as well.
It’s All About the “-ilities”
HubLogix can handle purchasing using relatively low-tech means like PDF and email, through more sophisticated options such as Excel files and FTP uploads, all the way up to APIs and older (but widespread) communication methods like EDI. Understandably, they prefer to use the more structured methods as they tend to be faster and more reliable.
In software development, we talk about the “ilities” – less specific requirements like reliability, flexibility, scalability and so on. With so many vendors, all using different file formats and communication methods, there’s a lot that can go wrong and make those “ilities” hard to attain.
HubLogix address that with constant monitoring, so they can make fixes before there’s any serious impact. They also develop relationships with vendors, particularly those used heavily by their clients, so they can be notified in advance when systems are going down or changes are made. The constant flow of orders and client feedback also help keep all the integrations working.
No retailer wants the customer-facing side of their business to stop working. But if an integration with a dropshipper stops working, for example, there’s no immediate impact on the consumer. They don’t know what should happen in the background, or even have any reason to care, as long as they get their order quickly and accurately. So a short-term breakdown in a supplier integration can be covered manually, until things are back to how they should be.
So Who’s This For?
Purchasing automation could help many sellers, but the biggest benefit will be for those who buy from suppliers the most frequently. There’s a lot to be said for shallow stock levels and regular re-ordering for any retailer, but it’s those who make heavy use of dropshipping who could really transform their business.
New clients have often solved a lot of problems themselves, but each order still takes 12-15 minutes to process when they add it all up. As they were growing, they would add multiple store fronts and extend their vendor and dropshipper network, and it was becoming more and more complex. They became their own worst enemy, because they were growing the business but finding things that couldn’t grow with them.
We’ve become what I call a year two or year three technology. We have people call us all the time saying, “Hey, I’m going to launch my store front next week, and I need to have something like you guys.” But quite frankly we tell them to call us back in six months because we can’t help them very much if they don’t have anything to automate. We’re better positioned to serve people who take hundreds or thousands of orders per month and are looking for flexibility to handle their situation.
Purchasing automation is of huge value, and HubLogix have tackled it to an extent I’ve not seen before. With all the platforms and services linked together, the potential to run a store on “autopilot”, as they call it, is quite real.
HubLogix are certainly innovative, but do they have the reliability, customer service and ease-of-use to back it up? This is where I have to step aside and let you hear from sellers who use the software to manage their business. You can find HubLogix in the Web Retailer directory.
If you are an HubLogix customer, or have used them in the past, a review would be much appreciated by the Web Retailer community.