Member Q&A: Why do some websites say Doba is a scam?
This is a special excerpt from the January 2008 Doba Newsletter by Jeff Knight: Vice-President, Marketplace - Doba. This excerpt helps describe exactly what Doba provides for retailers & suppliers and why those who don't understand might claim "scam."
From time to time, we field questions or concerns from customers who have read something negative about Doba. This month, we want to address what Doba is as well as what we are not.
In marketing one of the easiest ways to position your product's value, is to put it in contrast to the leading product, solution or service. In essence, instead of explaining what their product, or service is, the marketer focuses on what someone else's is not. In politics, candidates do this all the time. The idea is simple: by accusing their opponent of discretions or inconsistencies, they take the attention off their own message. If it works, it makes the mudslinger seem like a genuine 'good guy'. While it may not be the strongest long-term strategy; it is a quick and dirty way to promote your product.
If you do a search for Doba, or even drop shipping, you will see pages of results that include Doba. Some of the results are sponsored by Doba and by its affiliates. In addition to these results, you will undoubtedly see results stating, "Doba is a Scam." In general, these results are sponsored by marketers or affiliates of competing solutions who are employing the mudslinging strategy and using Doba's name to garner more traffic and customers. However, their claims are almost always unfounded or misguided. The reason most cited for Doba being a "scam", is "Doba is not a wholesaler!" Ironically, we never claim to be wholesaler.
If Doba is not a wholesaler, then what is Doba? Doba is a technology company with a product sourcing software platform. The software platform aggregates different wholesaler, distributor, and manufacturer products, inventory and order information into a common, standardized platform which retailers use to research, list and hopefully, resell products directly to their consumers. In addition, Doba's platform includes software tools that allow the retailer to organize and filter literally millions of products and manage their back office functions such as order fulfillment and fraud. All monthly fees are based upon the data the retailer wants and sophistication of the back office tools they require. Any website or consultant who tells the retailer that they can easily work directly with hundreds of wholesalers is lying or at minimum, providing an overly simplistic view of retail.
While all wholesalers may have the same basic information, none of them store it and provide it to retailers in exactly the same way. That means a retailer who wishes to work with more than one supplier still needs to standardize product data into a common format in order for it to be useful. Furthermore, the retailer needs the technical ability and resources required to make this process automated (or at minimum, replicable) so they don't start over from scratch each day. Once the data is standardized into a common format, the retailer still needs to filter and organize it into meaningful results. The 'shotgun approach' of just blasting entire feeds into search engines/marketplaces and hoping that the end-user finds the gem within the list is a naïve and ineffective merchandising strategy. In addition, keeping your front facing data in sync with your back-office functions can be a nightmare.
Without Doba, a retailer would need to create working relationships with all the suppliers they want to work with. Whether cold-calling or going to tradeshows, each supplier needs to be contacted and a working relationship needs to be started. While some wholesalers and distributors embrace drop shipping, many are very hesitant to enter retailer relationships that have not proven themselves. The retailer may have all the resources and technical ability they need to successfully integrate with the wholesaler, but that doesn't mean that the wholesaler will embrace working with the retailer. Most successful wholesalers (like any successful business) have very little time to evaluate all the requests they receive and will spend most of their energies working on relationships that have the quickest, easiest, most strategic return on investment.
From a practical standpoint, Doba sells packages ranging from $49 to $149 a month; however, the value of Doba is not just the margin from wholesale product sales, but also an elimination of the costs it takes to produce sales. For example, a employee being paid $10 per hour costs an organization roughly $1,600 a month without considering insurance, workman's compensation, and overhead - not to mention the cost of employee learning the ropes, making mistakes and working at less than 100% capacity. One of the biggest barriers small businesses run in scaling their operations, is under-valuing their time and costs initially and running into trouble as the costs of those extra personnel, resources, etc., begin to grow.
The most experienced and largest retail organizations in the world utilize platforms and technologies like Doba. Some use third parties to manage their own inventory and others use software packages that allow them to merchandise more effectively. There is no legitimate reason why the small retailer shouldn't have access to similar tools. In essence, Doba's service levels the playing field for small online retailers by allowing them to employ the same strategies as fortune 500 companies for a fraction of the cost. Is Doba a scam? Of course not. Is Doba the right solution for all online retailers? That depends entirely on the retailer's needs and available resources. Only you can make that ROI decision for your business. However, anyone claiming that there is a 'secret source' is at best, very inexperienced.
