Update: As of August 2013, Amazon is a DonorsChoose.org vendor. When creating projects, teachers now have access to the hundreds of millions of items available on Amazon.com.
In December 2006, right before I joined DonorsChoose.org to lead the Operations Team, I received an email from (founder & CEO) Charles Best. It was a forwarded message from a donor frustrated by what he considered to be high prices for classroom materials on our site. Charles’ note to me: “You’re starting your job as COO next month, and this is a frequent complaint we receive from donors. Fix it.”
Given our resource constraints (we only had 3 people on our project fulfillment team at the time) and our scalability priorities (to open our doors to every public school in the U.S. in 2007), we decided to focus our energies and resources on building a system that would process thousands of orders every day, as scaling to serve more students was a higher priority than pricing and we didn’t have the resources to aggressively pursue both. We spent countless hours ensuring that our fulfillment systems were best-in-class, streamlined, and fit to rival those of Fortune 500 companies. Our thinking was predicated first and foremost on increased processing efficiencies, even if that meant occasionally missing out on some savings.
To accommodate our model, we placed strict requirements on our vendors (and still do) to excel in five areas:
1. Product selection
2. Product availability
3. Product quality
4. Best-in-class shipping
5. Excellent customer service
Today, we work with 20+ vendors that adhere to our strict requirements, including electronic integration with Ariba – our e-procurement and fulfillment system. These systems enable us to purchase resources electronically and communicate with vendors directly, allowing us to serve teachers faster and more effectively at scale. The vendors we work with range from Best Buy, CDW, and Quill to Nasco, Lakeshore Learning, and AKJ Books. Today, we have the capacity to fulfill over 1,000 projects every day thanks to the processes, policies, and tools that we’ve deployed over the last 4 years. Couple this capacity growth with the fact that our vendor relations and project fulfillment staff is just 5 people, and you can see why I’m very proud of what this team has accomplished.
Nevertheless, our focus for 2011 and beyond will be to work with our vendors to drive better pricing. We will use Amazon prices as the pricing benchmark we aim to achieve.
You might be asking, “why not just add Amazon as one of your vendors?” We’d love to do just that, but unfortunately Amazon can’t do it. We have been talking to Amazon for the last two years, having conversations with Jeff Bezos, other members of Amazon’s executive team, and a couple of Amazon’s board members. For strategic reasons, Amazon has shifted away from enabling the sort of automated purchasing, fulfillment, order tracking, and payment that we need. This is disappointing for us, both because we know Amazon would benefit our donors and teachers, and because we have spent significant effort trying to make something work with Amazon.
So, we’re moving on and pursuing other partnerships. We’ve started conversations with Target, Walmart, and Sears to see if they can adhere to our strict requirements and would like to become one of our vendors. We expect to make a decision about adding one of these vendors before the end of next school year.
I thank you in advance for your understanding and support as we work to improve our service to our donors, our teachers, and ultimately our students.
I also welcome any follow-up questions you have on this important topic. Simply comment on this blog and I will be checking it periodically and responding to any questions posted.
Chief Operating Officer