What’s In Store for E-Commerce?

On the right-hand wall of Vitessa’s lobby hangs a framed sketch of the first strategy plan drawn up by the company’s founder Dave Mullan. Perhaps it serves as an anchor for the Seattle-based company that is enjoying rapid expansion and industry recognition for its Merchant Exchange platform.

Just last week the company’s executives flew down to San Francisco to present their business plan at the prestigious industry conference Internet Outlook at the Airport Marriott Hotel. Vitessa not only was one of the top 10 companies (out of 100) selected for the “Investor’s Choice” award, but it also won top honors in the conference’s “Commerce Enabler” category.

According to Mullan, the award validates the huge market opportunity for Vitessa’s platform that allows sites with strong brands and loyal customers to compete with pure-play e-tailers on an even playing field.

While today most content and community sites generate revenue by sending browsers to ecommerce affiliate providers, Vitessa provides such sites with a network of suppliers, services and ecommerce infrastructure.
This allows such site to continue to focus on their content expertise, while at the same time become profitable by turning their browsers into buyers.

In order to further introduce its Merchant Exchange to the CEOs and what Mullan refers to as the “internal entrepreneurs” of high-traffic sites, Vitessa kicked off a $2 million campaign earlier this month with a full-page ad in the Wall Street Journal.

One such company that is beginning to take advantage of Vitessa’s Merchant Exchange is San Francisco-based Teamplay.net. Teamplay.net joins big players like NBC and Microsoft Press which were some of Vitessa’s first clients. The site, which sponsors online gaming tournaments, is already using Vitessa’s platform for event registrations, and hopes to move into selling hard goods very soon.

Teamplay.net’s COO Justin Lin told seattle.internet.com that Vintessa’s VIPC (Vintessa Internet Product Code)technology will allow them to bundle products together using the same unified shopping experience under their brand. VIPC will also allow them to market products on email newsletters, chat sessions and interactive content.

According to Hurwitz Group Director of Electronic Business Strategies Carol Baroudi, the paradigm shift that the Vitessa Merchant Exchange exemplifies – that is keeping the visitor at the site, merchant branding for outsourced e-commerce, complete end-to-end service – represents a significant turning point in e-commerce solutions. No longer must a merchant “give away the store.”

“The market opportunity for this kind of solution is huge. Content sites are ever more desperate to find ways to become profitable – and this model, I feel, is significantly more attractive than banner advertising or affiliate marketing,” says Baroudi.

Because Vitessa plays such a critical role in the order management process, it has invested a lot of money into fraud prevention technology and is constantly looking for ways to upgrade its Merchant Exchange.

Earlier this Summer, for example, Vitessa turned to the Pacific Northwest offices of Imperial Bank to provide merchant card services for its platform. Now, Web merchants don’t have to take title to inventory or have inventory exposure until a consumer transaction has been settled. Thus, web merchants are able to book the top-line revenue and retain gross profit.

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