by Ed Sperling & John Moore, Sm@rt
A new breed of auction sites is sprouting up on the Web,
peddling everything from spare parts to refurbished systems. Some
sites cater to the channel, others to end users, and still others
take a hybrid approach.
Business-to-business auction sites, also called exchanges,
are struggling to win market awareness and a meal ticket that
extends beyond the current round of venture-capital funding. The
market is evolving and changing so rapidly that many online
companies are being forced to put together new business plans
One of the newest entrants to the market is TekSell.com, a
Raleigh, N.C.-based start-up that offers to certify every product
it sells. "The key was getting the price high enough to
warrant touching it," says TekSell CEO Andy Cummins, who
notes the average price of products sold on the company's Web
site is $5,100. That average is based on everything from
components for Sun Microsystems servers to high-end switches for
TekSell targets both resellers and end-user businesses as
customers. The company auctions vendors' and distributors' excess
inventory via the Web, first to authorized resellers and
integrators, then to the general public. TekSell reserves a
password-protected portion of its site for VAR-only auctions.
Tradeloop Corp., meanwhile, positions itself as a channel-only
B2B exchange. The Burlington, Mass., company offers a forum
through which resellers, brokers and distributors can list and
purchase computer equipment and parts.
Rohi Sukhia, president and CEO of Tradeloop, refers to rival
exchanges as "disintermediation plays. They want to become
the middleman. They are competing and trying to do away with the
channel." In contrast, Tradeloop provides a neutral
marketplace for resellers, he says.
Tradeloop soon will have company in the neutral exchange space.
E-Exchange Ltd., a London-based B2B exchange active in Europe and
Asia Pacific, plans to open shop in the U.S. market. The company,
which trades in computers, components, peripherals and servers,
is "perfectly suited for distributors, VARs, retailers,
solution providers, and other channel players," says a FAQ
file on e-Exchange's Web site.
Other B2B exchanges are, in effect, resellers themselves.
Edgewood, N.Y.-based TechSmart.com, for example, audits, tests,
cleans, packages and then remarkets the surplus IT gear it
receives. The company sells directly to small and midsize
businesses and home offices, and guarantees the products it
offers for 30 days.
In all cases, trust is critical. "When it comes to IT,
the trust factor is very important," says TekSell's Cummins.
And there's no shortage of B2B exchanges vying to earn that trust.