In a little more than 10 years, Newegg grew from a startup to become one of the largest online retailers of computer hardware and software. While its selection of more than 3 million products and competitive pricing played a role, it was the company’s dedication to the overall shopping experience that really distinguished it. Newegg has received the highest ratings and certifications from organizations such as CNET, BizRate and Shopping.com, and is ranked on par with Nordstrom for its customer satisfaction. In this SlideShare see what happens when an online partner system helps Newegg hatch a new services offering.

1. © 2013 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information. Page 1 of 2
Partner Case Study
EXECUTIVE SUMMARY
NEWEGG INC.
● Online Computer Hardware and Software
Sales
● Whittier, California USA
● $2.8 billion sales, offer > 3 million products
BUSINESS CHALLENGE
● Sell Cisco Small Business Support Service
with Small Business products
● Tie serial number of product to service
contract easily
● Help customers gain increased value and
satisfaction from purchases
NETWORK SOLUTION
● Enabled an easy End Customer Registration
capability with Cisco and our distribution
partner
BUSINESS RESULTS
● Went from zero service sales to a significant
services attach in first quarter alone
● Enabled Newegg to offer Cisco services for
the first time, delivering greater customer
satisfaction on their hardware purchases while
contributing greater margin
● It is now easy for end users to enter serial
numbers entitling their to service contracts
immediately
Online system helps partner hatch new services
offering
Partner Profile: Founded in 2001 as ABS, Newegg has grown into one of the largest
online retailers in the world. In 2012 the company
realized annual sales of $2.8 billion in computer
hardware and software from its location in Southern
California. It has received numerous awards for
both total sales and customer satisfaction.
Situation
In a little more than 10 years, Newegg grew from a startup to become one of
the largest online retailers of computer hardware and software. While its
selection of more than 3 million products and competitive pricing played a
role, it was the company’s dedication to the overall shopping experience that
really distinguished it. Newegg has received the highest ratings and
certifications from organizations such as CNET, BizRate and Shopping.com,
and is ranked on par with Nordstrom for its customer satisfaction.
Many of its customers are small or medium-sized businesses (SMBs) that
have no or a very minimal internal IT staff. As a result, they are very reliant
on outside technical support, especially from product manufacturers.
Newegg recognized being able to help SMBs with their service needs,
especially on network products from Cisco, was an opportunity. But it wasn’t
as easy as simply saying “let’s offer services now.”
“When a customer purchases Cisco hardware and wants to add a service
contract, you have to tie that contract to the product’s serial number,” says
James Young, Merchandiser, Warranty & Services at Newegg. “Normally
that happens at the point of sale, but that system didn’t work for us. We sell
in high volume, and have a facility with more than one million square feet of
floor space. It would be impossible from a labor management and cost efficiency standpoint for us to take a product off the shelf
and enter the serial number before shipping it. The result was we weren’t selling Cisco services.”
Newegg recognized they were losing a revenue opportunity as well as a chance to build even more customer loyalty by
providing a more complete solution. The question was how to reconcile Cisco’s requirements with the realities of the business.
Solution
In 2012, Young was discussing his desire to grow the services business with representatives from Cisco and D&H Distributing,
Newegg’s distribution partner. They mentioned that Cisco had developed a new service purchase and entitlement capability that
allows partners to sell services the same way they sell products. Partners can set up SKUs in their system and customers can
purchase them at the same time (and in the same shopping cart) as they purchase products.
What makes it work is a mechanism that sends an email to the customer after the product is received, prompting him/her to
enter the serial number in order to activate the service contract. This End Customer Registration capability is tied to Newegg’s
EDI system, so when a service contract is purchased the email is sent automatically, saving labor on the front and back ends.

2. ©2012 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information. Page 2 of 2
Business Results
Cisco, D&H and Newegg’s internal IT team worked together to create the first-ever Cisco ClickToAttach/End Customer
Registration implementation. Once it went live in May 2013, the results were powerful and nearly instantaneous.
“We went from zero sales in Cisco services to significant services attach in the first quarter,” Young says. “That uptick was
achieved $40 at a time. Our numbers have continued to increase each quarter. It’s obvious there was a huge untapped demand
for Cisco services among our customers. We’re now able to tap into it.”
The customer-facing end has been one of the catalysts in driving sales. When customers place Cisco SKUs that are eligible for
service contracts in their shopping cart, the “We Suggest” column prompts them to add a contract to their purchase. While it
sounds simple, there was a lot of work on the back end by Cisco, D&H and Newegg to make it happen.
“When we fulfill a hardware order there is a physical component,” Young says. “That is the world in which we’re used to working.
When we fulfill a service contract order, however, it’s all virtual. There is nothing to pull from a shelf or ship to a customer, but
we still have to show something in the system. It took a little while for Newegg to become comfortable with that concept.”
While Young feels the overall project went smoothly it wasn’t without its challenges. “At first we didn’t think there was a reason
to include the model number with the service contract order,” he says. “But as we got into it we realized it was necessary. We
were able to make the change quickly, which helped ensure the timeliness and accuracy of the service contract order. We
continue to make adjustments to make the system even better.”
Currently Newegg is offering four levels of business support services online. Based on this experience, the company plans to
expand that offering.
“The use of ClickToAttach/End Customer Registration has been very beneficial to us,” he says. “Normally ordering services
requires speaking with a salesperson, but a lot of our customers don’t want to do that. They just want to place their orders. Now
they can go online and order the services they need. Customers like the convenience, and we like the fact that we’re selling
them a more complete solution. I think it’s going to catch on quickly, and may very well revolutionize the way services are sold in
the future.”
Young believes that the partnership approach Cisco and D&H brought to Newegg continues to be a factor in its success.
To learn more about Cisco SMB Services, visit: www.cisco.com/web/partners/sell/smb/products/services.html
To learn more about Newegg, visit: www.newegg.com
To learn more about D&H, visit: www.dandh.com
“The initial challenge was great, but by working together diligently we
were able to knock it out of the park. Selling services was foreign to
Newegg at first, but now everyone sees the value. Cisco and D&H were
very patient and did a great job of giving us something that distinguishes
us from the competition and improves the customer experience.
— James Young, Merchandiser, Warranty & Services, Newegg
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