"We give business owners an opportunity to do all their business in one place," says Gretchen Sorensen, director of public relations for Seattle-based Onvia.com. "If you’re a buyer, there are more than 100 services you can access, from 401k plans to Web design. We have more than 25,000 sellers selling products and services through our site. We’re getting incredible testimonials from people who say our site is revolutionizing business. One person said he’s hired an employee just to follow our Web site."
Onvia.com (www.onvia.com) and Bizbuyer.com (www.bizbuyer.com) work in similar ways. A prospective buyer visits the Web site, chooses a category of product or service, requests quotes from registered sellers, receives quotes from interested vendors, compares quotes, and makes a purchase. While Onvia.com serves as a one-stop shop for both purchasing and consulting, Bizbuyer.com is more of a pure online auction house that offers little in the way of advice or handholding.
On the other hand, DigitalWork.com, which can be reached through www.HispanicBusiness.com, positions itself as a "do-it-yourself business agency." The site offers small and medium-size firms services ranging from public relations to marketing and from sales to information technology. Visitors to the site can participate in 30-minute online workshops in each area for prices starting at less than $100. In the online public relations workshop, for example, visitors learn how to create and disseminate news releases without the hassle and expense of contracting with a PR firm or hiring a communications professional.
These and other online b-to-b companies have begun attracting the attention of Wall Street. In a March 1 IPO, for instance, Onvia.com shares were initially priced at $21, opened at $46.50, and closed at $61.50. Bizbuyer.com, having attracted $45 million in venture capital last year alone, is likely headed for an IPO of its own. Evidently, investors are taking the expansion potential of the online b-to-b market seriously.
"Most of our development – more or less 60 percent – has been in b-to-b," says Ralph Armijo, CEO and president of Navidec, a leading Internet development and consulting company based in Greenwood Village, Colorado. "I think b-to-b is a very significant driver because it has a more significant impact [than b-to-c e-commerce] and offers businesses a cost reduction. It will help them garner market share in nontraditional ways. It helps link them to other businesses and customers."
Mr. Armijo started Navidec in 1993 after working in the computer industry for 18 years. What began as a value-added reseller developed into a full-service e-commerce consultancy once he recognized the Internet’s imminent evolution from a tool of government and education to a distribution channel for businesses. He merged with a software company that focused on the Internet in 1995 and has since focused on the Internet as a developer of e-commerce solutions and services.
"Within the construct of providing e-commerce solutions, we consult, build, and manage," Mr. Armijo explains. "On the consulting side, we talk to all aspects of management. If you only have one part involved, your probability for success is reduced significantly. With building, we’ll collaborate with the customer as if we were building a home. We’ll provide blueprints of the whole project and set a schedule. Just as when you build the first room in a home you have to integrate into the 50th room, we architect the whole Internet initiative and develop a 90- to 100-day schedule of implementation. Time to market is probably the primary driving factor in today’s e-commerce initiatives."
Mr. Armijo in fact is so confident of the online b-to-b market’s potential that he has created a dot-com incubator at Navidec. Having launched companies in the automotive and financial industries, Navidec is currently incubating a b-to-b service in the agriculture industry. While he receives upwards of one business plan a day from people requesting technical or strategic support with a start-up, Mr. Armijo says he accepts less than 5 percent of proposals.
He says a successful b-to-b start-up, like any Internet start-up, must have industry knowledge and expertise, personnel to run the business, money to finance operations, and the technology to bring everything together. To the companies that meet these criteria, Mr. Armijo preaches patience. The evolution from ordinary business to successful e-business, he says, involves a four-step process.
"The biggest pitfall is expecting too much too soon from a site," he explains. "You need to understand where you are in the business transformation curve – the life of every company on the Internet. Every company starts by knowing it needs to be there; then it moves into the prospecting stage, interacting with customers or suppliers. Then comes business integration, where, for the first time, you have return on your investment. Transformation, the final stage, is a whole new business paradigm."
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