Online-only sporting goods retailer Dazadi eyes long-term growth with a new e-commerce platform and focuses its merchandise on private-label and exclusive products.

In the past 12 months, recreation and sporting goods retailer Dazadi.com has replatformed its e-commerce site and revamped its merchandise strategy. The web-only retailer’s plan had two main aims:  Improve the look and features of its e-commerce site and fill it with more exclusive and private-label goods, says Jason Boyce, co-founder and CEO of Dazadi.

A year after the replatforming and six months after the shift in merchandising strategy, Dazadi has doubled its conversion rate and is starting to grow its sales, Boyce says.

It’s really hard to walk away from that many millions of dollars in revenue, but we had to future proof ourselves.
Jason Boyce,
Co-founder and CEO of Dazadi

But the path to get there was not along the straight and narrow. The retailer, which sells such items as treadmills and billiard tables, launched in 2002 as mainly a drop-shipper and used an open source e-commerce platform called osCommerce, Boyce says. After a bad sales year in 2013, the retailer started doubling down on selling on online marketplaces. A year later, however, Boyce realized that this strategy was short-sighted, as it’s hard for retailers to compete on Amazon.com Inc. when there are many other merchants selling the same goods, he says.

“We realized in 2014, this was a short-term strategy and the long-term strategy is making an awesome e-commerce site, which we are still in the middle of. We’re not done cooking,” he adds.

Currently, about 70% of Dazadi’s sales are via marketplaces and of that, 85% comes via Amazon, he says. Dazadi is ranked No. 640  in the Internet Retailer 2017 Top 1000. Last year it generated an Internet Retailer-estimated $22.0 million in web sales, according to Top500Guide.com, up 35.8% from $16.2 million in 2015.

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In June 2016, Dazadi launched its new site, built on technology from e-commerce platform provider BigCommerce Pty. Ltd. The vendor was a good fit, Boyce says, because it could handle nuances Dazadi needed. For example, the retailer wanted a custom field on a product pages where it could attach a PDF assembly manual for the item. The retailer includes a physical manual with each shipment, however, many customers download the online instructions, he says.

Other e-commerce platforms Dazadi vetted didn’t offer custom fields for adding attachments on product pages, Boyce says. It also helped that BigCommerce has worked with other retailers that ship heavy products like furniture and was familiar with freight costs for items too heavy for conventional delivery services, he says.

The new platform also has ready-to-use features that would have taken months for the retailer to code itself, Boyce says. For example, Dazadi can easily upload product videos and it can create a coupon code for sub-categories or categories of products. Previously, a coupon had to be offered across the entire site, he says.

The platform also has “Google-friendly coding,” Boyce says, which helped boost organic traffic to its site by 20% almost immediately after launching, he says.

“They’ve got some pretty good SEO under the hood, so we had a nice bump in traffic right out of the gate,” Boyce says.

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It took about six months to replatform. However, five months of that time Dazadi spent “unplugging” its enterprise resource planning system to prepare the accounting and inventory software to work with the new e-commerce platform, Boyce says. “We really liked our ERP system,” he says. “It worked really well for us, so we decided we are going to keep it.”

When Dazadi first launched, it built its own ERP system that included all the features it needed at the time, such as warehouse and inventory management. The downside, however, was that the code was intertwined with its previous e-commerce platform, and it took about five months to rewrite it to work with the BigCommerce software. Dazadi used a team of four employees—two permanent employees and two on contract—to rewrite the code. The cost of the new e-commerce platform is more than $250 per month.

With the site relaunched, Dazadi began in January developing a new merchandising strategy in that emphasizes private-label and exclusive goods. Previously, Dazadi sold sporting goods products from manufacturers that also sell the same products to other merchants.

“Having the same UPC code as 20 other sellers, didn’t work,” Boyce says about the competition of selling the same products as other marketplaces sellers on Amazon. “We redid our strategy and came up with our mantra, ‘Bye Bye Buy Box, Hello Dazadi.’” This motto emphasizes the retailer’s plan to not rely so heavily on Amazon’s Buy Box and more on its own e-commerce site. Plus, if Dazadi has more exclusive products, it doesn’t have to share the Buy Box with other marketplace sellers.

Changing the product catalog meant walking away from some revenue. Dazadi found that some of the drop-ship vendors weren’t able to perform as well as its own warehouses, such as shipping products quickly, and cut those contracts which accounted for $2.5 million in sales in 2016. Plus, Dazadi discontinued a contract with a vendor that was producing a defective product that accounted for $3 million of its sales last year.

“It’s really hard to walk away from that many millions of dollars in revenue, but we had to future-proof ourselves,” Boyce says.

So far, Boyce is happy with both initiatives, he says. Sales in June 2017 were about the same as in June 2016, which Boyce says he is “stoked” about. Plus, in July sales are back to a high single-digit percent growth, he says.

“The fact that we’re back to a growth pattern already is a huge deal,” Boyce says.

 

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