Kaola’s direct purchase arrangement is best described as ‘B2B2C’. To elaborate, Kaola buys your stock B2B. They then provide the point of sale and take care of the last-mile logistics as orders are placed on them. However, to take advantage of Kaola’s Direct-Purchase model, suppliers must take over the back-end management of their product listings. For example, Kaola does not provide any in-house customer service.
To provide customer service, set prices, change designs, update listings etc. you must first gain access to Kaola’s ‘supplier back-end’ interface. For this, Kaola charges a $10K security deposit – a relatively standard practice amongst China’s CBEC platforms. This deposit is returned when the operation/relationship is ended, subject to no contractual obligations having been infringed.