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Go global: One way to make an alliance

Go global: One way to make an alliance

Global has hit a home run operating Web sites, shipping orders and handling payment for retailers including Sports Authority, Oshman's and Athlete's Foot. The stores, which include a few online-only partners, get about 7 per cent of each sale; Global pockets the rest.

Global was founded on the idea that many retailers want to sell online, but most don't have the time, money or expertise to do it.

The strategy wasn't always considered a winner. When Global started in 1999, Internet-only retailers were supposed to spell the end of conventional stores. That obviously hasn't happened. "We thought that people were really mistaken in thinking the right model was to build your own brand" online, says Global CEO Michael Rubin. His efforts have been paying off. Global reported sales of US$42.8 million in 2000, nearly eight times 1999 sales. Despite the economic downturn, analysts expect Global to be profitable by the end of the year.

Global's business has its challenges, of course. Its growth relies on the strength of its associates. One of Global's early store partners, Sports and Recreation, went out of business before Global could launch the company's site. Also, Global must be sure that it's careful with inventory; because it purchases and stocks goods for all its retailing partners at its Louisville, Ky., warehouse, it bears most of the risk if the stores don't drive customers to their Web sites.

For this reason, Global's business model looks a lot more like Amazon's new partnership with Borders Group. than Amazon's deal with Toys R Us. But Global never set out to be the Net's biggest retailer. Rubin seems satisfied running one of the most successful e-commerce firms you may never see.


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