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Ty’s drop-ships licensed e-tail into high gear

Given how long the retail industry has been in risk-averse mode now, it's surprising that someone in the North American licensing industry hasn't yet written 'Ode to Shrinking Shelf Space' or 'I Got the Big Box Blues.' Securing bricks-and-mortar retail distribution is definitely still the number-one hurdle for licensors and licensees of all shapes and sizes. But online upstart Ty's Toy Box is trying its best to improve the optics of its electronic alternative with a new e-tail hub called TTB Marketplace. Through a hook-up with drop-ship software service CommerceHub, TTBM offers Ty's licensor partners a wider retail reach and better product development capabilities.
August 1, 2007

Given how long the retail industry has been in risk-averse mode now, it’s surprising that someone in the North American licensing industry hasn’t yet written ‘Ode to Shrinking Shelf Space’ or ‘I Got the Big Box Blues.’ Securing bricks-and-mortar retail distribution is definitely still the number-one hurdle for licensors and licensees of all shapes and sizes. But online upstart Ty’s Toy Box is trying its best to improve the optics of its electronic alternative with a new e-tail hub called TTB Marketplace. Through a hook-up with drop-ship software service CommerceHub, TTBM offers Ty’s licensor partners a wider retail reach and better product development capabilities.

Ty’s assortment of licensed goods has grown dramatically in the two years since it rolled out with six dedicated storefronts. Now featuring products related to roughly 80 licenses, the e-tailer is fast becoming a go-to source for kids and parents looking for SKUs based on properties that might not crack the six or so spots big-box retailers have open in any given season.

But membership in CommerceHub could kick things up a few notches by unlocking new distribution opportunities with the service’s 30 member retailers (which include Sears, Kohl’s and Costco) and connecting Ty’s partners with the 3,000-plus manufacturers in the network. Essentially, the drop-ship service lets its retail members feature any of the products manufactured by registered suppliers without having to take physical custody of the goods or pay for the inventory up front. Orders placed online are transmitted directly to the suppliers’ warehouses, and the goods are then shipped straight to the consumers. The system, says CommerceHub COO Michael Nelsen, eliminates inventory risk for the retailer. His company charges roughly US$1 per transaction, which is paid by either the retailer or supplier, depending on how they want to arrange the deal to cover the cost.

‘By putting enough connections together, we can present these brands the way they should be – by brand, not by product category,’ says Ty’s Toy Box CEO Ty Simpson. In practice, what that means is Ty’s will be pitching its all-in-one licensed boutique concept to other e-tailers, setting up shops featuring every conceivable Wiggles product on kohls.com, for example. Again, it’s a win-win for the retailers; they’ll be able to offer more products, take zero risk financially, and get a read on whether or not a license might work at their bricks-and-mortar locations.

As for Ty’s retail operations, membership in CommerceHub lets the company offer even more product SKUs and bolster categories that have traditionally been under-stocked, such as DVDs. More importantly, the money Ty’s saves on investing in inventory will be plowed into developing product and retail programs for lesser-known licenses, much as it did with Cookie Jar’s The Doodlebops in 2006. VP of business development George Stolpe says Ty’s plans to delve further into producing first-run soft goods (i.e. t-shirts and accessories) for IPs with fanbases clamoring for product that isn’t yet available. And right now, the sky’s the limit for the e-tailer. ‘If you have a property with consumer demand,’ says Simpson, ‘bring it to us.’

TTB Marketplace is also open to lending out its expertise in building licensed online boutiques – including website design, marketing, gathering consumer data and order fulfillment – to licensors wanting to chart their own e-tailing strategy. Stolpe says the fee structure will vary according to services rendered.

About The Author
Lana Castleman is the Editor & Content Director of Kidscreen and oversees all content for Kidscreen magazine, kidscreen.com and related kidscreen events. lcastleman@brunico.com

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