Canal: What Entrepreneurs Can Learn from this Dropshipping Brand

Want to learn how Canal went from a dropshipping startup to a lucrative eCommerce platform with a Shopify app? It all begins with a dropshipping problem and the need for a reliable solution. While it can be wildly profitable, eCommerce is a rollercoaster ride. And gaining the momentum to reach the peak of the track can be challenging–some retailers never make it. 

Enterprise channels like Shopify have made it easier than ever for new eCommerce businesses to create a storefront. But that doesn’t mean it’s easier to attract customers to the storefront or find ways to create new revenue streams–all necessary for gaining that crucial momentum. 

So what’s the solution? Canal helps retailers supplement their offerings with third-party products they believe in. By providing guidance, selectivity, and credibility to consumer purchases, it guides retailers as they build the inventory layer of their online shopping experience by leveraging the power of dropshipping. 

In this case study, we’ll take a closer look at the launch of this dropshipping platform and how it eliminates the problem of complicated manual management in dropshipping while helping eCommerce businesses boost their revenues through carefully curated products. 

Plus find out how to build your first million-dollar business… FREE.

What is Canal?

Canal is an eCommerce dropshipping platform that links like-minded companies to sell each other’s products with the goal of helping retailers connect with new consumers and revenue streams. As a two-sided network, it matches brands looking for distribution channels with brands seeking access to virtual inventory. 

“We’re not the shelf or the products you put on the shelf, we are your access to inventory,” said Canal co-founder and CEO Bennett Carroccio. 

Canal exists to streamline marketplace execution by offering an infrastructure that drives brand partnerships. With Canal, any retailer can add new products to their catalog with a few clicks. Canal takes the hassle out of the dropshipping process by routing the right information about orders, shipping, and payments from one store to another. Since its 2020 launch, Canal has released an all-in-one Shopify app and curated a network of over 165 brands retailers can partner with to build their virtual inventory and attract new customers. 

Canal aims to be a platform-agnostic service, connecting quality brands across the internet. Through its platform, the company has helped retailers achieve a 15% increase in average order value, 1.64 times the repeat customer rate, and a 50% increase in customer long term value.  

Who founded Canal?

Bennett Carroccio, Clay Schubiner, Liam Kinney founded Canal in 2020. 

What is the origin story of Canal?

The Canal co-founders noticed that eCommerce teams were struggling with their marketplace execution and set out to create a solution. They already knew the most successful retailers were leveraging brand partnerships and a dropshipping business model and selling each others’ products on their storefronts. But it was a difficult process for new retailers to navigate. 

Bennett, Clay, and Liam had a shared passion for creating seamless eCommerce experiences and wanted to make the work more enjoyable and less complicated for themselves and the eCommerce community. As a result, the trio founded Canal to create a streamlined way for online retailers and product makers to connect with each other, integrate each other’s products in their stores, and take the hassle out of complicated manual management of dropshipping orders. 

To meet the needs of its target audience, Canal built a curated network of brands ready to unlock new streams of revenue so retailers could reach consumers at the point of purchase instead of post-purchase. The team released a Shopify app, calling it the “premier all-in-one tool for curated brand partnerships.” Brands selling with Canal include Olipop, Yumi, Mushie, Andie, and Sunday Citizen, among many others. 

Since its launch, the Canal team has grown to 40+ thinkers, makers, and storytellers in San Francisco and New York. 

How was Canal funded?

Canal is a privately-held company and does not publish all amounts or sources of funding. However, the startup received a seed round of $4.5 million in March 2021. It also received $22.5 million Series A funding in March 2022. Canal reports that its financial support has come from top eCommerce and technology investors, including Forerunner, Coatue, Primeset, AirAngels, and Box Group, among others. 

What made Canal grow?

Canal’s growth since its 2020 launch can be chalked up to how the company met a need in the dropshipping industry. Because the founders had experience in the world of eCommerce, they knew retailers needed a better way to access virtual inventory and connect with new customers. The startup also identified complexities in the marketplace structure and provided the infrastructure through its Shopify app to simplify the process of tasks like product integration, setting commission rates, and arranging customer shipments. 

Bringing more than 165 brands (with more than 1,000 brands on the waitlist) onto the Canal platform also promoted the company’s growth. Retailers can turn to Canal to expand their product catalog without purchasing inventory or dealing with upfront costs. Brand curation is a key driver of Canal’s business model and growth, but the true power of the platform is in its ability to yield quantitative, data-driven results. 

Because retailers only pay a small fee when they make a sale, they can sell products through their storefronts with zero operational lift and better real-time data analytics.  This is incredibly appealing to retailers, especially new stores trying to reach new customers on a small budget. 

“We’re helping them just to be able to sell to a consumer that didn’t know them already,” Carroccio said. “They’re finding consumers elsewhere on the internet, and really expanding their scope of who they could sell to.” 

What can entrepreneurs learn from Canal?

Entrepreneurs who want to build a successful business like Canal can learn some powerful lessons from the dropshipping platform’s growth since its 2020 launch. Here are some key takeaways:

• Identify a need and provide a solution
• Streamline tasks or make life easier for your target audience
• Offer opportunities for growth and value-added benefits with low-risk or minimal upfront expense
• Promote your business’s differentiator–what sets you apart from other companies? 
• Build an app
• Take an existing business model and make it better

FAQs

What is Canal? 

Canal is a dropshipping platform that connects online retailers with carefully-curated brands they can sell risk-free alongside their own products. The company helps eCommerce businesses build and enhance the inventory layer of their online shopping experience through dropshipping, also known as virtual inventory. 

What is the Canal Shopify App? 

Canal is an all-in-one app providing marketplace infrastructure and a network of curated brands so retailers can sell third-party products online through dropshipping. 

What are the features of the Canal App?

Through the Canal App, retailers can tap into a network of vetted brand partners and negotiate with the partners to customize and maximize the partnerships and virtual inventory. From getting expert curation guidance to seeing real-time analytics on sales, the Canal app enables eCommerce business owners to set their storefronts up for dropshipping success with far less time and hassle. 

What platforms allow Canal for dropshipping? 

Canal is designed to work with several platforms, including Shopify, Google, TikTok, Facebook, Instagram, Pinterest, Salesforce, and Magento. 

What brand partnerships does Canal offer?

Canal has a network of more than 165 brands retailers can sell through their storefronts. The company carefully vets and researches the brands before adding them to their list. Brands selling with Canal include Andie, Truff, Yumi, Mushie, Great Jones, Fly by Jing, Olipop, Osom, Birthdate Co., and more. 

Takeaway

Although Canal is a new player in the dropshipping industry, its fast success indicates it is here to stay. The Canal founders understand its target audience–eCommerce retailers–and empower them to leverage dropshipping without the risk. 

While there are other companies offering dropshipping platforms, Canal sets itself apart by connecting retailers to carefully curated brands to reach new customers and level up the shopping experience. With access to virtual inventory that doesn’t require an upfront investment, even new retailers can expand their reach and achieve higher levels of profitability. 

Do you have a business idea that provides an innovative solution to a pesky problem? As Canal demonstrates, understanding your target audience and their hopes, dreams, needs, and problems is the best place to begin. 

Whether you have a brilliant business idea or just know you want to make millions, we invite you to dream big with Capitalism.com. Our goal is to shape one million individuals into millionaires by 2028. If you are up for the challenge, we'd love for YOU to be one of them.

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