Net Market Builders Focus on Suppliers

After a wave of building exchanges to bring buyers online, some companies want to do more for sellers.

“Today the B2B [business-to-business] equation is unbalanced towards buyers,” said Russ Henry, senior vice president of marketing at Trigo, one of several “sell-side” companies starting up. Trigo, which offers to hook up suppliers with Net markets, officially launched today, in partnership with e-commerce engine builder Ariba.

The companies believe that suppliers find it too difficult and expensive to enter Net markets, freezing out the liquidity that exchanges need.

For example, office supply company Staples wanted to build an online sales channel to give its biggest customers access through their own e-procurement systems. After building about a half-dozen systems, it estimated what it would cost to develop the channel for the next 100 customers. It was prohibitive, both in cost and time, Henry said. Thats when it hired Trigo, he said.

“We allow a single connection,” he said, but cost isnt the only barrier to entry. “Most marketplaces dont let you put all your [products] online. They have capacity limits.”

Comergent Technologies, another young company that also just struck a deal with Ariba, tackles this problem. Ariba will use Comergent software to make it easier for manufacturers to list product information on public and private exchanges. Suppliers with complex products often cannot publish their catalogs on exchanges because of limited memory or frequent changes. Comergent software lets a buyer in the exchange leave to visit the vendors catalog, select the product, then complete the transaction back in the exchange.

“Theres no channel conflict,” said Jean Kovacs, president of Comergent.

Exchanges need to do more to attract sellers, she said. The idea for the software came to her at an Ariba conference where some people didnt share the enthusiasm about e-marketplaces.

“At that conference I sat down with suppliers, who were all thinking, Why would I want to do this? Im exposing myself to competition, my margins get cut down, I have a complex product, ” Kovacs said.

International Data Corp. analyst Rob Rosenthal said attracting buyers still is more difficult than getting sellers, but what attracts sellers can attract buyers. “Its a nice addition,” he said of the sell-side products.