"For the little guy, e-commerce can open new doors"
phillynews.com
From selling chemicals to filling jobs, entrepreneurs say Web businesses will save clients time and money.
By John J. Fried
INQUIRER STAFF WRITER
LAS VEGAS -- Toss the term e-commerce into a roomful of people and they start talking about the biggies -- Dell, e.schwab, Amazon.com -- using the Internet to sell traditional products to generate huge revenues for themselves.
Not at Comdex.
Here you would have gotten an earful from entrepreneurs convinced they have found new ways of making money, and lots of it, on the Web. Among them were:
+ Randy Decker, a Tucson, Ariz., electrical contractor who in January will launch a Web-based service linking small electrical contractors with millions of small businesses that may want to retrofit their buildings with energy-saving lighting. The Web site has great potential because Decker has a joint marketing agreement with Affiliated Distributors, a King of Prussia consortium responsible for steering $14 billion in business a year to more than 187 suppliers of electrical equipment.
+ David Perry, cofounder and chief executive officer of Chemdex Corp. in Palo Alto, Calif. Chemdex, which has attracted $15 million in venture capital, serves as an online intermediary between thousands of companies selling highly specialized chemicals for research and scientists who need those substances quickly.
+ Rob McGovern, president and chief executive of CareerBuilder Inc. McGovern's Reston, Va., firm links companies seeking workers with the millions of job seekers using the Internet to scout for their next position. CareerBuilder is responsible for helping hundreds of companies post as many as 40,000 jobs a month, a number likely to double each quarter for the foreseeable future, McGovern says.
+ Robbie Mihalyi, a senior vice president at IMX Mortgage Exchange, in San Ramon, Calif. The company, Mihalyi says, is determined to bring a Web-based order to the chaos that marks the back and forth between mortgage brokers and the institutions they canvass for loans as they negotiate terms acceptable to the person buying or refinancing a home.
Though Decker, Perry, McGovern and Mihalyi are in very different businesses, they have one thing in common: They are convinced that the Internet provides them a unique opportunity to offer services that would be unprofitable and unmanageable in a conventional business environment.
Take Decker.
He once did what all electrical contractors specializing in retrofitting lighting systems do: He went only after big contracts.
"It costs a dollar a square foot to do retrofitting no matter what, so you might as well go after the business with the 100,000-square-foot facility and not the 10,000-square-foot job," Decker said.
Which means, in essence, that millions of small businesses with a pressing need to install more efficient lighting are never contacted by the larger electrical contractors.
Small businesses are also ignored by small contractors because the contractors often do not have the tools to conduct a proper assessment of a business' needs, cannot get a handle on the lighting supplies that would fit those needs, and do not have the resources to monitor their newly placed installations to ensure that they are doing the job.
Enter Decker's ES Energy Systems, which, beyond linking contractors to small businesses interested in retrofitting, will give contractors online capability to work out the right retrofitting plan, find the right fixtures, and the means to monitor remotely each installation and watch for needed adjustments.
The entrepreneurs showcased at Comdex believe that they will succeed because they can save their clients time and money.
Perry points out that his clients are scientists who have to spend four to five hours a week poring through 40 or 50 catalogs on their shelves, looking for the hormones, antibiotics, reagents and other chemicals they need at the prices their institutions will allow them to pay. "The market we serve is inefficient," Perry says. "There is no one-stop shopping."
But when harried researchers go to the Chemdex Web site, Perry says, "we can give them more information and choice and reduce to 20 minutes" the time it takes to find, choose and order the right stuff for next week's experiments.
The entrepreneurs who are finding potentially lucrative niches give comfort not just to other business types looking for a way to make money on the Internet. They also thrill people such as Charlie Finnie, managing director of Volpe Brown Whelan & Co., a San Franciso investment banking firm, who calls firms such as ES "infomediaries."
CareerBuilder's McGovern believes that his company has reduced the average cost of hiring from $8,000 to $1,000 for his clients. Perry says that he has reduced the costs involved in finding and ordering chemicals from $150 to $10 per transaction.
As more and more infomediaries get into the act, Finnie says, their work can only help the nation's economy.
"These cost reductions will be passed on in the form of lower prices, and lower prices create an elasticity of demand, which means people will buy more," fueling continuing economic growth, Finnie concludes.
|
