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August 1999

Virtual Tinker's Wagons And The Return Of Haggling


Let's imagine that I sell a product. We can revisit Marketing 101 and call it a widget. Consider that I'm mildly computer literate, but that's all. I'm thinking about implementing a company Web site, but even that's going to be a major step for me. Talk about virtual shopping carts and Web callback to me, and my head's likely to begin rotating 360 degrees.

It's ironic. The very nature of e-commerce has taken the spirit of marketplace competition and exploded it. Even a low-priced item like a CD or a book can be found on a multitude of different sites for varying prices. Although the highly competitive nature of the Web is throwing merchants for a loop, customers like knowing how easy it is to click around until they find the best deal or the best shipping options. However, many small businesses simply do not have the capital, the expertise or the bravado to jump into the melee that is e-commerce. Even among companies that do have a Web presence, most of these firms are currently incapable of actually processing orders online. The result is that the companies with a strong Web presence and advanced systems in place to take orders are naturally dominating e-commerce.

My theoretical company is small and not particularly high-tech. I sell only one style of widget. I do not plan to expand my product line in the future. However, I feel strongly that my widget is both better and more economical than Gigantic Company.com's widget. I would like buyers to be able to find my product online, though I have no capital or technology to make it available on my own steam.

So am I out of luck? Not necessarily.

Just as many consumers prefer the convenience of shopping malls rather than driving from store to store to find Christmas presents for Auntie Marjorie, Uncle Henry and the kids, e-shoppers may soon embrace the concept of "Web malls." Unlike general Internet portals and Web search engines which lead surfing shoppers to different Web pages and often exclude competing vendors, these sites aim to be a single source for a multitude of business and consumer product categories. There are several of note, and several more on the e-horizon.

Founded in 1996, BUY.COM follows the Web mall principle to a limited extent in that it sells a broad range of entertainment and computer consumer goods. The site sells computer hardware and software, DVDs and videos, PC games, books and CDs. Prices are lower than those of brick-and-mortar stores and the selection is quite extensive.

Two recently launched sites have added an extra element to this concept and are expanding beyond the concept of "here is our product, buy it if you want."
In the case of IMA's newly introduced site, buyingedge.com, shoppers submit requests to sellers and it becomes the seller's responsibility to present the potential buyer with the best product at the best price. buyingedge.com was designed for a broad, unlimited range of vendors, from jewelry to lawn and gardening supplies. The benefits to buyers and sellers are equal: the buyer is in control of the purchasing process, and the vendors can participate, at no charge, in a service that leads buyers right to them without the necessity of investing in an e-commerce presence on their own (vendors need only a PC with a standard browser to participate). buyingedge.com does not exclude competing vendors, so consumers can be fairly certain they are seeing highly competitive price tags on the products they're seeking. The site became open to the public and began processing transactions in late June 1999.

Another newly launched site, BizBuyer.com, targets business products and services vendors and buyers. Biz.Buyer puts the buyer further in control of the buying process in that small companies submit their purchasing needs to the participant vendors, and it is the vendors' responsibility to bid for buyers' business by submitting proposals. The site includes an online buyer's guide to help educate consumers about the participating companies' products before they begin the buying process. A successful implementation of this site will provide vendors with qualified leads at no cost and with little or no effort. At press time, BizBuyer.com had 4,000 vendors on board.

So back to my widgets...care to e-haggle?

The author may be contacted directly at troth@tmcnet.com.

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