Discovery is outsourcing its entire e-commerce business to Delivery Agent Inc., a company which specializes in working with media companies on its online sales platforms. The new business model for Discovery will rely on royalties, a much safer and cheaper route than managing the online store internally.
“Transitioning to a royalty model provides opportunity for increased profitability while significantly reducing the financial risk of holding large product inventory,” said Kelly Day, Chief Operating Officer, Discovery Commerce, announcing the move. “Discovery’s brand strength and legacy of creating award-winning consumer products, paired with Delivery Agent’s track record of building winning commerce solutions for the entertainment industry, makes this an ideal go-forward strategy for achieving our growth goals for Commerce.”
In exchange for the royalties Delivery Agent will oversee all direct-to-consumer operations of Discoverystore.com. The store brings in an average of 12 million customers a year to its collection of Discovery channel programs, specials and educational toys. Delivery Agent will oversee the launch of new stores for TLC and Animal Planet later this year.
The move is the latest part of an effort by the company to distance itself from the retail business. In 2007, Discovery announced that it would closing all of its retail locations and focusing on e-commerce.