Leader of the Pack

It’s fashionable to write off dot-coms as passé, but every once in a while they surprise you by blazing new trails. Luggage pure-play eBags is at the forefront of one of today’s hottest fulfillment trends: the non-traditional business partnership.

This, says eBags CEO Jon Nordmark, is where the future of fulfillment lies. “I think that in the long run, it will move more and more that way,” he says. The five-year-old company relies mostly on its suppliers — including luggage makers such as Samsonite, High Sierra, American Tourister, and JanSport — to fulfill customer orders, a strategy that Nordmark believes “allows everybody to leverage one source of inventory instead of multiple sources.” Orders usually are shipped from the manufacturer within 24 hours.

Advanced technology is the key to this close cooperation. Several of eBags’ vendors share inventory information with the company four times a day. eBags has a revenue-sharing arrangement with its suppliers and provides them general merchandise forecasts. In another innovative arrangement, eBags recently inked a deal with prestige luggage manufacturer Tumi to operate its Web site. “We’re running their store online and watching their inventory, which makes use of our technology wisely,” says Nordmark. “We’ll never compete, so it’s a real nice group of core competencies coming together.”

The four-year-old eBags carries 7,000 SKUs, shipped 1.6 million bags last year, and has been profitable for the past two quarters. Year-over-year growth has averaged 40%. In the upcoming holiday season, Nordmark says, his goal is to ship 60,000 units a month.

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