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Lightspeed CEO Dax Dasilva stands in the company's office in Montreal on Dec. 11, 2020.

Christinne Muschi/The Globe and Mail

Lightspeed POS Inc. is expanding its business to include suppliers, as the Canadian technology company jockeys to compete with dominant retailers such as Amazon.com Inc.

Montreal-based Lightspeed, which makes cloud software for retailers and restaurants to manage their cash registers and checkout systems, launched a new arm of its business on Tuesday to help retailers restock their inventory.

The system, called Lightspeed Supplier Network, is launching for bike stores, pet stores, jewellery stores and outdoor sporting good retailers in North America.

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The new feature will help small retailers and independent suppliers better compete with Amazon, Lightspeed chief executive Dax Dasilva said.

“A large e-commerce merchant like an Amazon has a lot of visibility across the supply chain – a lot of data. In this case, we’re using all of the data that’s available to benefit independent, small- and medium-sized businesses and their suppliers,” Mr. Dasilva said.

The system aims to give Lightspeed’s retail customers an online marketplace to look for new, popular product suppliers, he said. Another goal is to make it more efficient for small shops to upload product descriptions and photos for online shopping, at a time when the COVID-19 pandemic has forced more local stores to rely on e-commerce.

“We hope to also give benefits back to the suppliers to help them really tune their manufacturing for what’s really popular ... so that ultimately independent retailers don’t have dead, dusty inventory,” Mr. Dasilva said.

By letting both small retailers and suppliers forgo faxing, phoning and e-mailing their purchase orders, Mr. Dasilva says Lightspeed is aiming attract more businesses to use its software.

Lightspeed isn’t the only technology firm chasing the supply chain – although different firms are taking different approaches. Ottawa-based Shopify Inc. has been investing in shipping and fulfilment centres for small businesses, while U.S. fintech company Square Inc. has an app store that includes inventory management software.

It could potentially be big business. In November, Statistics Canada reported the majority of online sales across the country in 2019 were between businesses and their supply chains. Wholesalers contributed $85-billion toward Canada’s $305-billion in online sales in 2019, while transportation and warehousing represented $60-billion, manufacturing was worth $38-billion and retailers grossed $22-billion, Statscan said.

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Mr. Dasilva said deepening Lightspeed’s supply chain business has long been a goal of the company, which went public last year with a goal of raising money for new lines of business.

Lightspeed is popular among bike store owners, an industry that requires particularly complex inventory tracking, Mr. Dasilva said. The company has been using its ties in the bike community to help test the supplier software.

“They can have more than 100,000 inventory items in the database, in terms of all the parts, and accessories, and frame and brakes,” he said.

“When there are new stores, the suppliers will recommend those stores come on to Lightspeed because they will reap the benefits of that direct integration ... so, we hope to become the default system.”

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