This story appears in the April 2015 issue of Entrepreneur. Subscribe »
In 2006, when Jonathan Jenkins and his wife, Danielle, opened their first business, a women’s fashion accessories store in Abilene, Texas, they worked with suppliers in Asia. But they quickly found that overseas vendors required high minimum orders on the scale of Walmart and Macy’s, so the couple had to buy more inventory than they needed.
The store closed during the Great Recession, and the couple moved on to their next venture, a tech startup that focused on gamification apps for the Chinese ESL market. That fizzled out as well, but between their experiences in retail and tech and dealing with Asian suppliers, they came up with OrderWithMe, an online buying club that helps U.S. independent retailers save money by aggregating their merchandise orders and taking them directly to manufacturers in Asia.
By joining together orders from bike shops, bakeries, plumbers or other small businesses within a single category, OrderWithMe can land better pricing and terms. The service is free; OrderWithMe makes its money by taking a cut of whatever discounts it negotiates with the wholesaler or distributor. (Jenkins declined to share how much.)
In the past year and a half, that model has helped Las Vegas-based OrderWithMe sign up nearly 5,000 customers, mostly by pursuing members of existing buying groups and industry associations as well as franchisors who can bring in multiple stores.
Beyond its purchasing power, the 50-person startup offers small businesses a single platform to manage all of their wholesale inventory purchases, invoices and payments. That’s what sold David and Bonnie Goldberg, owners of the Baby Blossom chain of baby stores in northern Virginia. To stock his stores, David deals with more than 200 wholesale vendors, each with its own set of rules. Some have catalogs that must be thumbed through; others require orders by phone. One vendor even requires that orders be submitted by fax.
“It’s a highly inefficient process with no consistency and a lot of hassle for a small retailer like me,” Goldberg says.
He joined OrderWithMe a little less than a year ago, and while he says it’s too early to know just how much money he’s saving, he already sees value from the service. “If just half of our vendors are on their platform,” he says, “it would save me a minimum of 35 hours a month.”
Bringing that level of efficiency to small businesses has helped OrderWithMe raise more than $35 million over three rounds of funding. Major investors include Zappos founder Tony Hsieh and Advantage Capital Partners.
“This is my passion,” Jenkins says, speaking from his experience as a brick-and-mortar retailer. “I’m not sure any large company would be as passionate about helping the small independent business as we are.”