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Doba offers a web-based product sourcing platform connecting eCommerce retailers with wholesale suppliers who drop ship products. Jeremy Hanks, cofounder and CEO of Doba, sits down with Brad Baldwin and introduces the Doba service.

The following interview is a transcription of a vidcast published on RockyMountainVoices in August 2007.

Brad Baldwin: This is Brad from Rocky Mountain Voices and I'm here with Jeremy Hanks, the CEO of Doba here in Orem, Utah. Welcome to the vidcast. Tell us a little bit about Doba. What is Doba?

Jeremy Hanks: Doba is a software company, what we do in a nutshell is provide technology that links wholesale suppliers to retail merchants. We've provided a web platform so that small-business retailers that are selling predominantly through e-commerce can come online and access a inventory and fulfillment system. We tie that back to the inventory the fulfillment capacity of these wholesale suppliers that we currently work with. We work with 200 different companies and over 1 million products, which we interface through our platform. On the retail merchants side we have 30,000 different retailers and sellers that interface with us. We help retailers find products to sell and help wholesale providers find retailers to distribute their products.

Brad Baldwin: So your software is the middle of all of this.

Jeremy Hanks: The core of it is the inventory fulfillment system. We have different levels and strategies as far as onboarding different product categories. Our strongest product category is our consumer electronics, computer, laptop categories, bed and bath, clothing and apparel, and home and garden. We have a little bit of everything and we do take a systematic approach as far as how we bring on different suppliers and retailers. It's the chicken or the egg problem: if you don't have enough supply on the supplier side you can’t attract the retailers.  And if you don't have enough retailers on the retailer side the suppliers don’t move products. We do have strategies around, we call them our beachhead categories. We penetrate them more deeply and then we move on and add additional categories from them. It takes a long time to do.

Brad Baldwin: I imagine that most people understand the concept of some sort of a wholesaler and supplier and the actual end distribution point. What does the software enable them to do that they couldn’t do themselves by calling up a wholesaler?

Jeremy Hanks: One of the key things that we do is the process of aggregation. Instead of interfacing with one company, the retailer gets access to 200 different wholesalers and everything is standardized. If they were to try to do that themselves they would have to deal with 200 different companies, everything from processes to data feeds, ordering processes, how does it all work with the nuts and bolts of everything. That's the first thing, we enable them to have many relationships. The old way to do things is one-to-one. The reverse is for the suppliers. If I'm a supplier and I want to get access to these small sellers and online sellers, if I worked with Doba I just work with Doba and I get access to 30,000 companies looking to sell products. Otherwise, I have to find those 30,000 people on my own. There's that one-to-many component with the efficiency and aggregation.

The other piece that we help enable that they can do is we've created a huge buyers group. We can typically negotiate better and more optimized pricing and shipping fees and costs because we flow all of the product purchasing and the wholesale purchasing power of these retailers all through one connection point. We’re able to make that process more efficient and more optimized. Those are the core value of what we do and why you should work with someone like us if you're a small business as opposed to trying to do it yourself.

Brad Baldwin: So small-business signs up with Doba and creates some kind of an account--just like they would with the standard kind of relationship business-- and may use your web platform to find products and find inventory. Is that right?

Jeremy Hanks: Yes, there's an interface that they can access that virtual inventory. We represent all of the different products. We have that component that has the product description, pictures, information and data about these products that the suppliers plug into our platform. Now it's a virtual representation of this physical product that the supplier has. They use it to find the products, to take the products. We integrate with partner eBay, and put them into other platforms where they're going to turn to sell those things to consumers. All of this is now in a virtual inventory piece.

The other component is the fulfillment. Once they've sold those products, it's a virtual at that point. I'd like to think that there's not necessarily a good reason economically for e-commerce retailers to touch physical products. They don't have consumers walking through their doors saying I want to try this pair of shoes on before I buy it. It’s e-commerce; it's virtual. So if we can help the business-to-business side of it be virtual it's a more efficient way for them to be able to be a retailer in an e-commerce market. But the core piece of what we do is virtual.  Once they sell a product, our fulfillment system kicks in and the suppliers do direct fulfillment or drop shipping directly to the end consumer. It's a more efficient way to get products from the people who make them, which is the suppliers and manufacturers and distributors, to the people who buy them which is consumers. We keep it virtual on the Doba-sided things, we keep it virtual for the retailer. The physical product goes strictly from the supplier to the end customer. We enable a more sufficient supply chain for small businesses.

Brad Baldwin: You are one of those businesses that people don't really know about unless you're going to be selling something. You are not really out there marketing yourself to the end user unless they're going to become a retailer.

Jeremy Hanks: We target our marketing to people who are either looking to start or grow or expand their retail businesses. And also on the supplier side, for suppliers who are looking to add additional channels. We're not going to supply are saying will help you get Wal-Mart as a customer, we're going to supplier saying wouldn’t you like to have a channel of small, specialty retailers that are online that can present your brand and many more places than a big box retailer can. Those are the two dynamics and we don't market outside of that. In a lot of cases, people find us because they're looking for someone who can drop ship or for wholesale suppliers and that's kind of where we insert or marketing sales into that flow of people looking for those kinds of services.

Brad Baldwin: What is your business model? Is it tied to numbers of sales? Are you just taking a piece of the middle?

Jeremy Hanks: We don't take a piece of the middle, we didn't want to try to add a cost there because the margins online have gotten so small anyway. Our model is that we charge basically service fees/ subscriptions fees. We offer sort of a model and charge that to the retailers, we don't charge the suppliers we subsidize that side of the platform. We onboard those companies to make it all work. We cover those costs because we think it's a good way to do it. If you have a two-sided platform you just pick one side of the equation to make money on. We make money from the retailers paying us anywhere from $40 a month up to $100 a month and we also do let people do annual subscriptions as well. That's how we generate our revenue, that is our business model.

Brad Baldwin: Depending on the size of the retailer and their volume, they get a different price. What is the percentage of businesses that you have that are eBay sites versus I have my own retail presence online?

Jeremy Hanks: That has really shifted. A few years ago, we did a survey that asked people how many were selling on eBay. 92% said they were selling on eBay, but of those same people 40% were also having their own store. Today it's a lot less, about a 50-50 split. It seems to be more likely that if they are doing one they are not doing the other. It is shifted for some reason. A lot of these small businesses feel that it's not compatible to do both, I don't know if it's because the mindset has shifted or the dynamics of eBay have shifted over the last few years. We see more and more people thinking that if to be more successful they need to have their own identity and have their own place of business, so to speak. We try to educate through information to help our customers, we recommend different tactics to drive buyers from eBay, Amazon, Overstock listings to their websites. The big companies have their on multi-channel marketing and listings and we think the small businesses can do that, too.

Brad Baldwin: You just won an award. Tell us a little bit about it.

Jeremy Hanks: The award we just won is called the AlwaysOn Top 100. It's given out by AlwaysOn which is a new media company that does conferences, magazine, website, blogs. It was started by a guy named Tony Perkins, who is very well known in the Bay area of Silicon Valley. They work with KPMG and basically look at companies and applicants that apply. They try to find the companies that have the most buzz, the most destructive products, technology innovators, that have global potential and come up with 100 companies out of 600. Doba was chosen as one of those 100 a couple of weeks ago. It's a Silicon Valley-based award, and it's definitely a good thing for us to have won, because in Utah we sometimes struggle to get the exposure and the recognition that we think we deserve, but we're probably biased.

Every month we have an all team meaning, and last week I was able to get up in front of everybody and show them our cool plaque and show them that this was an award from the big leagues. If you look at last year, companies like Cafépress, Bit Torrent and YouTube have won this award in the last few years. They are the Who's Who in technology and consumer-based companies.

You can see more about us at dobo.com with the company link down at the bottom would be the best place to go. Everything is online: our website is our business.