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Launch HN: Convictional (YC W19) – Supplier Network for Retailers
96 points by ChrisGrouchy 25 days ago | hide | past | web | favorite | 51 comments
Hey HN,

We’re Roger and Chris, co-founders of Convictional (https://www.convictional.com/). Convictional makes it possible for online retailers to find, onboard, and integrate with third-party suppliers. We do this by connecting them to a network of suppliers that manage the inventory and ship those products directly to the end consumer on their behalf.

The idea behind Convictional started when Roger worked at GNC, a large natural health products retailer, at the age of 17. One of the biggest challenges was onboarding. As a retailer, you either buy inventory or ship from third parties ("drop shipping"). They decided to expand their catalog by selling some products that were shipped directly by the supplier. To do this, GNC required both sides to implement EDI (an old school, pre-internet data format for exchanging information between business systems) or manually exchange flat files for things like inventory, orders, and product information. We only got a fraction of the total vendors we wanted to onboarded because of this.

A few years later, we met while working together at Shopify on B2B. There, we saw that the challenge of onboarding third-party brands still existed for retailers, and people were experiencing the same pain trying to use EDI to get it done. Online retailers also didn’t know how to find third-party brands to work with or struggled to dropship with existing partners.

Convictional’s product is an app and API that syncs product information, inventory, orders, fulfillments, and payouts between online retailers and all of their suppliers. We do this by integrating with the systems used on both sides through an API or pre-built connectors to ecommerce platforms like Shopify. We later added a way to find suppliers after online retailers told us that they also wanted to access a network of connected third-party brands.

We’re using a generalized data model in the middle with a bunch of mapping, transformation and transmission steps on each side. Similar to what EDI does but much easier to set up. The goal is to turn what today requires a 6 month IT project into an email invite and an app install. It’s an industry that has existed since the 60s, and it’s probably the last major software industry that touches commerce but has not meaningfully been updated.

To do this we developed our own queueing system in Go that can map events from buyers and sellers, transform them from the source format into the destination format, validate and apply a bunch of domain-specific business logic to make sure what crosses the bounds of buyers and sellers actually makes sense, and then send those into another queue that passes it to their partner. We basically have to control the state of three systems for each transaction. Before us, it could take up to 24 hours to know whether that loop succeeded or not but we’re able to do it within a few seconds. There are a lot of real life things that enables, but mostly it enables a good experience for the buyer’s ultimate consumers and less inventory for both sides.

Our belief is that online retailers will be less inclined to take on inventory. That’s why we started by building the tooling necessary to automate dropship. Over time, we’ll launch tools that can enable more forms of B2B trade in a way where regardless of IT skills, both sides can have systems doing their purchasing and selling for them. Today large companies enjoy significant advantages through this integrated approach, and soon every buyer and seller can too.

Brands and suppliers can join our seller network for free. If you make or sell physical products on an ecommerce platform, consider joining. For online retailers, we charge a flat monthly fee and a percentage of GMV, depending on volume and which work gets outsourced to us.

If you have questions, we’ll be here to answer them. We’d love any feedback, ideas, and/or EDI horror stories that you may have as well. Thank you!




I think as trade tensions increase with China, there is going to be a huge market opportunity for people in the US to start overtaking some of that business that AliBaba currently owns. As a US based solution, you guys are tapping into a real opportunity here. Good luck.

* Quick idea, you guys should buy a warehouse, stick it in the middle of Odgan Kansas, and charge suppliers to store their stuff there, than ship it for them. With that location you can send almost anything to almost anywhere in the US in 2 days on ground as long as you get it out quickly, and you directly inject it into the carriers hub.


It's funny you say that because some of the largest distributors in the world are basically what we have + a 3PL facility attached to it. Our hope is to partner with distributors who do the physical stuff and provide better software, which so far is working pretty well. We would be really out of our depth on the physical side of things at this point. Shopify just waded into their own 3PLs though which is interesting. Shipbob also does this quite well.


Yep it seems like Deliverr and Shopify are trying to pry sellers away from Amazon FBA.

I'm actually working on an open-source fulfillment system for Shopify where users can source their inventory from ShipBob, Deliverr, any custom 3PL:

https://github.com/openshiporg/openship

Could we integrate with Convictional?


Yes: https://docs.convictional.com/ although it's worth a conversation to figure out the easiest approach. roger@convictional.com


Wasn't aware of the Shopify thing. I'm currently venturing into the physical things, which is one of few things actually good at anyway. So maybe we can have a chat one day? I'm based in Germany, so probably no immediate synergies, but I could imagine that customers might be interested in a combined solution of your tech and an carrier-independant party running daily operations.


Totally, roger@convictional.com if you want to continue the conversation.


What's your relationship with carriers? I spent a bit of time with "Large E-commerce company" We would have 3rd party sellers not delivering on time (or sometimes not delivering at all). They would claim FedEx/UPS was late or FedEx/UPS would claim it was on time but the 3rd party shipped with a different account than "Large E-commerce Company." It was a big headache for the people ensuring delivery and bad customer experience. It sounds like you want to sit as a sort of middle layer between sellers and supplies to ensure data quality. (is that correct?) If so, do you plan to integrate with carriers or how do you plan to address that.


So part of the advantage of the approach is that we integrate with the existing system of the seller. Once they get some volume, we can calculate the following:

* Fill time: time from posting the order to the seller until they ship it as verified by their carrier integration

* Ship time: time from order being placed until ship time

* Complete time: time from order placement to notification of shipment on the consumer side

As time has gone on, we can tell who ships reliably and put those sellers in front of other buyers, etc. So eventually the data we have gives us and buyers and indication of how well vendors are adhering to SLAs around shipping times. Often the expectation is 24 hours, so it's not hard to red/yellow/green people into buckets and manage the buckets. Eventually we can offer our own SLAs for sellers we put in front of buyers but for now we're just gathering data and providing reporting.

Edit: to answer your question directly, we don't currently integrate with them. Generally speaking we can get the same data from the platform we integrate with, so it saves us from having to build N more integrations, but I agree the closer we can get to ground truth the better for vendor SLA.


Ah, sounds familiar! We didn't use carriers managed by the dropshipping supplier but rather in-house managed ones. Helped but made edge cases not covered by existing in-house solutions a real pain.

I like what I see so far from Convictional. But one thing that puzzles me with similar start-ups is the disregard for actual operations. Has nothing to do with Convictional so. But since I see that as an opportunity I put my money where my mouth is.


I agree with this. I don't think it's a software only problem, and we ran business units like this before we got into the software side. The operations side is harder (generally speaking) it's more that the enablement tech that exists isn't working for current sellers. That's partly on us to fix, and partly endemic to small sellers not having B2B sophistication. So solving the problem also requires solving the physical logistics problems and education gaps that exist. So far we're just focused on the software and to a lesser extent education. There are really good operators out there that we're trying to partner with, who tend to be weaker at the tech.


Congratulations on the launch.

Would it be fair to say Convictional operates in a similar domain as https://supplier.meesho.com does in India? If not, what are the differences?

Is EDI specific to North America or a global phenomenon?

---

The hamburger-menu doesn't work when I block google-analytics and hs-scripts domains.

The links in the footer viz Retailers -> Marketplace Platform and Brands & Suppliers -> Brands simply load the homepage. Is that intentional?

Personally, I believe Convictional connects online retailers to brands. Focus on selling, let brands handle fulfillment. is wayy better than the abstract Become the Digital Destination for all of your customer needs without inventory risk.

Another nit-pick is that the entire page is all about retailers, but the top section has a link to Solution for Brands and it isn't clear really why the link exists top-of-the-fold when the entire page has no copy re Brands? That, or I hopelessly misread the copy.

---

All the best!


EDI is a global phenomenon. There are different standards and it applies across industries. For example, X12 is the North American standard of EDI. It's used in B2B trade, banking, health care, insurance, etc.

Meesho is interesting. It's like an ecommerce store in a box.

We aren't a conventional marketplace ourselves and we integrate with the systems that both the sellers and buyers are using. On the network side, we make introductions to buyers and sellers in our network rather than listing products from sellers on a mass marketplace (like AliExpress). We basically vet each retailer to see which suppliers in our network would make sense for them then make introductions if there's a fit. We also tend to be focused on larger retailers and distributors rather than people who are just getting started in ecommerce.

Thanks for the feedback on the site. Will fix the hamburger menu too. Good catch.

I like your copy suggestion. It makes sense for people who might be new to dropship. The "digital destination" line came from larger retailers we talked to that wanted to expand their existing product catalog, so we aimed that at them. They tend to already do dropship today with larger suppliers, but they struggle with onboarding smaller ones. The thought of having a wider assortment of products is usually what initially piques their interest. That starts a conversation around new tools that they could use.


Cool business model and something that makes sense for more online retailers to adopt. My question is how do you differentiate yourselves from Mirakl (https://www.mirakl.com) and F13 Works (https://www.f13works.com)


We have never seen F13 in a deal but they do seem like a valid alternative. Mirakl starts at $500k/year and minimum three years, and are pretty focused on existing offline retailers moving online and going marketplace, so they are pretty limited in who they can work with.

Our general feeling is that niche / values based aggregators are where the puck is going, as opposed to everyone being a worse version of Amazon, where people are shopping their values more often.

The other thing I would say, not to pick on any one of those offerings, is that we actually have a bunch of prebuilt seller apps to making onboarding easier. To our knowledge, that's unique, most of them just have an API and CSVs where as part of our product includes the seller side integration. Merely offering an API instead of EDI doesn't necessarily solve the problem, most of the sellers don't have ERPs or in-house IT at all so facing down JSON via API instead of X12 via EDI is equally impossible for them.


Is this more for established retailers or mom/pop shops who are wanting to get into shopify? Is this similar to Oberlo except not 100% reliant on aliexpress and more cross-platform support?

Have you thought about creating retailer plans for hobbyists/new entrepreneurs who want to just test a few ads/products on fb, then signup for bigger plans later on, or maybe a freemium/pay-per-sale model?

I ask as a developer, who's thought about doing dropship quite a bit (whenever I get dev burnout), original plan was buy shopify account, onboard products from oberlo, and get some product vids up on fb ads for the cooler products.


The Shopify/Oberlo buyers only sometimes end up being durable. For the ones that are, they come to expect better in terms of ship times, terms and other business things that aren't well handled by Aliexpress dropship. So generally speaking, buyers would graduate to us after they get to six figures. For sellers it's free so they can be big or small.


Love seeing products that tackle the un-sexy (fulfillment) side of sexy industries (e-commerce). Keep it up!


I had the pleasure of working with Chris at a startup competition in undergrad. Congrats to Chris and team, may success continue to come your way!


Thanks!


I love this idea, it's kind of like an affiliate network for physical goods. The delivery time is probably the only thing the scares me.


Us too. We're keeping data on sellers and their fill, ship and complete time. Fill time meaning how fast they fill when the order gets to them, ship time meaning how long it takes from the order time until the shipment occurs, and complete time meaning from time of order to time you get notified.


OPs: I feel like we might have some synergies if you extrapolate a bit out from what our product does on its surface. I can't put my finger on it exactly though. See the How can I list my shop question at https://attic.city/owners.


Yeah Attic sounds interesting and relevant. In general we're a platform and vertical agnostics enablement solution that doesn't suck, and so it's possible we could help you integrate directly with the sellers of the antique furniture. founders@convictional.com and we can talk more offline.


Will do. We're already "integrated" with nearly 1000 stores in 13 markets with upwards of 300,000 indexed products. Currently just a B2C focus though. I think there's another possible angle here.


Hi Roger and Chris!

I have read your landing pages but still not understanding how you are going to make leaps and bounds ahead of competition trying to add “selection”...

I see your biggest challenge is onboarding suppliers that are non-tech or don’t understand eCommerce platforms.

Otherwise you’re onboarding brands that are already listing their products with other dropshippers?

I run an a consulting agency for Amazon suppliers, essentially holding their hand through all things related to Amazon and eCommerce strategy.

I also run a marketplace store for when my brands don’t want to have their own Amazon relationship.

We haven’t pushed any brands to oberlo because it seems like a massive headache with low sales opportunity.

Who is your “perfect” brand?


Agreed re: Oberlo. So far it's fashion, furniture, homewares or other durable goods who have good reviews, started directly to consumer and then plateaued, and have US-based shipping. Even better if the product is made locally but that's less common.

Generally we can help them with a lot more than enable drop ship, which could be underwriting their receivables, doing EDI integration, setting up a B2B program, etc.

It's less focused on marketplace sellers and more directly on the company that sources or makes it. Hope this helps.


Drop shipping has been the bane of my online shopping experience. Products are often not as advertised and returns can be a huge hassle, so it has become a word I avoid. How do you plan to raise confidence for consumers in this practice?


We actually agree with this, we saw that inside Shopify. Bigger retailers are getting smarter about this and enforcing vendor SLAs. Meaning requirements like:

1. Accurate product listings

2. <24 hour ship times, enforced

3. No manual steps, only automated / integrated

4. Easy returns, funded by sellers

5. Sellers based in the same country

Drop ship can range from very small and generally not very durable online retailers to massive and very sophisticated retailers. In the case of the sophisticated ones, you may not even know the difference. Amazon for example has been drop shipping a lot more, but because of their vendor SLA people can't tell it's not from FBA. It's mostly just about good vendor SLAs, local suppliers and short ship times.

The other thing we're seeing is a continuum where people start out drop shipping, and then move to wholesale when the volume grows. That way 1. Consumers get access to smaller / newer brands early and then 2. Eventually the experience gets more controlled. We do both, just generally because our customers are growing but also because you really need both to make the experience good.


True for Amazon. There are cases, after some really hard internal fighting, of Prime enabled Dropshippers, meaning you even see the "order in x minutes for next day delivery" message. So it is definitely doable, hard work but doable. And every tech improvement to make that easier is very welcome!


Looks awesome Chris... what do you think your moat/defensible advantage is though? Can't Amazon or Shopify just replicate what you do with their network of retailers/sellers?


It would be unlikely for Shopify to build integrations with other back office systems that compete directly with Shopify (e.g. BigCommerce), so there'd be a cap on the amount of integrated trade that could happen. A defensible trade network would need to be independent and connect to any system that buyers and sellers use. We'll just keep making it easier for businesses to trade irrespective of the systems they use and their preferred sales channels (e.g. dropship, wholesale, etc.).


The name is interesting. The connotations for me are of either something in the justice system, or something oddly religious. I’d never have guessed that it was b2b related.

What’s the story behind it?


Before Amazon was named Amazon, one of the original ideas for its name was Relentless.com (btw, the domain relentless.com still redirects to amazon.com). We liked the word "conviction" and what it represents. Conviction.com wasn't available, but convictional.com was available. So we bought it.


Minor nitpick but: your logo seems to blend into the background because there's not enough contrast. Also, seems like the top is cut off if you zoom enough (it's also very tiny) https://imgur.com/a/gIgGpRp

Congratulations on the launch and best of luck for the road ahead!


Our logo is not great and also a carryover from a prior startup one of us had. We should definitely update it...


I feel that would be a good idea! I didn't really find a connection b/w the company and logo so had just flagged it off as abstract.

Not sure if this is the correct place, but I do design :P


Would this work for just existing products in the supplier marketplace? Or would it somehow enable custom products to be dropshipped?

The advantages for the retailers seems great but what about advantages for the suppliers? Eventually if enough people started using one supplier, they would have so much inventory they would need another warehouse.


We built it to enable people to onboard their own suppliers to the network, so it works with existing or net new members of the network and everything is centralized either way.

For the suppliers, they're often being asked to participate in lots of different flavors of "vendor enablement" program. Most are oppressive, involve EDI integration, 40 page vendor agreements and opaque invoicing. We're trying to get rid of those things, and ideally give them a way to have one integration for all of this stuff.


Congratulations on your launch. How many suppliers are in your Brand Network? Is it possible to obtain a list of active partners?


We haven't been sharing so at this point "hundreds", if you want to email founders@convictional.com we can share the ones relevant to your vertical.


Congrats on the launch, team! Excited to see you guys take on this space with so much prior experience & knowledge


Thanks Phillip, we really like using Doppler too :)


My first thought on reading the name was perhaps this was a business whose competitive advantage was hiring convicts and other people who are disadavantaged in the job market - I'm not sure how the name Convictional relates to the product?


People in our YC batch thought that we made software for convicts. We just liked the word conviction and what it represents.


I first read it as Convectional and I thought maybe that represented your transport model (like the convection heat transfer)


Congratulations. I hope you can put Ariba Network out of business.


Ariba is definitely a funny one. Our sense is that some of these trade networks are immortal. That said, the experience has to get better, and if it does, more trade happens, so it's by no means zero sum. The other thought I have is that we're quite sure being tied to a particular "island" is not optimal, it's better to be independent and let the "islands" build the functionality buyers and sellers want in their business. We want to stay a bridge, and stay agnostic.


This looks cool and can see many use cases. Hingeto I believe is also in the space. How do you deal with shipping multiple items in an order from different suppliers?


We can split and route orders to various suppliers. One of our first orders was 20 items from 19 different suppliers, so through that experience and much pain we made it seemless for the consumer. One page for order updates, unlimited different vendors. That ended up not being as hard as making the experience on the consumer side good, so that they didn't get 20 different update emails.


I meant more on the shipping side. It must be more expensive to ship 19 different shipments?


Yes it's definitely more expensive although often offset by who is taking the margin on the order. When you average it out it ends up being 5-10% of retail for shipping depending on the vertical which often gets priced in by sellers.




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