Canal

Canal (ShopCanal Inc.) operates an e-commerce platform that connects consumer brands and online retailers so they can sell each other's products, functioning as an all-in-one dropshipping and curated brand-partnership tool. Retailers use Canal to add third-party products to their catalogs without purchasing inventory, while supplier brands gain a new distribution channel; the platform routes order, shipping and payment information between the two stores. Canal describes itself as a two-sided network positioned as an access layer to virtual inventory rather than as a storefront or product owner.

The company launched in 2020 and emerged from stealth in October 2021. It released a Shopify app marketed as an all-in-one tool for curated brand partnerships and states an intention to be platform-agnostic across the web. Brands cited as selling through Canal include Olipop, Yumi, Mushie, Andie and Sunday Citizen. Canal is a privately held company and does not publish all of its funding details.

Founding story

Canal was founded in 2020 by Bennett Carroccio, Clay Schubiner and Liam Kinney. The founders observed that e-commerce teams struggled with marketplace execution: while successful retailers already used brand partnerships and dropshipping to sell each other's products, the process was difficult for newer retailers to set up and involved manual order management. The three, who had backgrounds in e-commerce and consumer technology, built Canal to give online retailers and product makers a streamlined way to connect and integrate each other's products.

Business model

Canal operates a two-sided network between supplier brands seeking distribution and retailers seeking virtual inventory, delivered as software including a Shopify app. Retailers add products to their catalogs, set commission rates and arrange customer shipments through the platform, with Canal handling the routing of order, shipping and payment data between stores.

Retailers pay a small fee only when a sale is made through the platform, so selling third-party products requires no upfront inventory purchase or operational lift.

Traction

As of March 2022, Canal had onboarded 165 brands with more than 1,000 brands on its waitlist, and the team had grown past 40 employees. The company reports that retailers using the platform saw a 15% increase in average order value, 1.64 times the repeat customer rate and a 50% increase in customer lifetime value.

Latest developments

Canal was named to CB Insights' 2023 Retail Tech 100 list of the most promising private retail technology companies. Its press page also highlights commentary on brands turning their websites into marketplaces and on how e-commerce brands can navigate a market downturn.