Small Businesses Get Online Help
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When major franchises, discount wholesalers and mass merchandisers began to set up shop around the country, many skeptics predicted that small- and medium-size "mom and pop" operations would soon go the the way of the dinosaur.
However, the World Wide Web has changed all that. Each day, new sites debut that unite small- and medium-size companies to provide large-scale buying power, share marketing solutions and exchange successful ideas and strategies.
It's a market that some say is just starting to benefit from the Internet's growth.
"The small- to medium-size business category has previously been underserved, but now it is exploding," said Eric Klein, senior analyst, Yankee Group. "There is a significant amount of activity out there and the category is now being barraged with information that can help it."
"The market is changing very quickly," Klein noted. "More and more larger companies are heading toward the small business community to help it adopt technology and grow the bottom line."
IBM Corp. launched the The Global Group Purchasing Program, a B2B buyer's auction and Internet solutions program, in May in Hungary. The site is designed to meet the needs of IBM's small- and medium-size business clients in Central and Eastern Europe.
"At the heart of the site is a reverse-auction e-commerce portal where businesses list the products and services they want to purchase and suppliers bid for the offer," explained Gabor Mohai, director of sales, IBM Hungary.
"The site provides businesses with access to goods and services they never had before while establishing an Internet presence," he added. "The system is free to buyers. Sellers pay a nominal commission. We feature a broad product range that includes the paper, electronic, agricultural and construction industries."
Hungary and neighboring Slovenia have proved to be Internet powerhouses. Therefore, plans are under way for the site to expand its reach throughout the world, said Marc Schectman, president of GGPP.
"Our clients are the buyers," he said. "They tell us what they want and we get the suppliers to compete in the reverse auction. We create a healthy competition among suppliers. Plus, the sellers pay a fraction of what they normally pay for marketing. The model is geared toward success throughout the world. We currently are setting up offices in Newport Beach, Calif., and Memphis."
"The reverse auctions really work," he added. "The benefit of working with vertical markets is that you gain and give expertise."
Online auctions are a force to be reckoned with, according to edeal Services Corp., which offers AuctionEnabler, an online auction application.
"As many business struggle with the cost of e-commerce solutions, we bring online auction creation and management directly to the desktop," said Colin Webster, chief executive officer of edeal. "AuctionEnabler lets any small- or medium-size business create and add a branded full-service online auction site to an existing Web site with no upfront development costs.
"While large businesses have benefited from the incredible growth of online auction sales, customized auctioned development costs that can easily exceed $150,000 have put this market far out of reach for many businesses," he continued. "Since it is free, the product removes these barriers for small and medium-sized businesses and allows them to enter this fast-growing competitive e-commerce market."
AuctionEnabler, which launched this summer, attracted 500 customers during its first two weeks online, according to Webster. "We are growing day by day and breaking down barriers," he said.