By Nick Patience OrderTrust Inc makes its money from transactions made over the web by sitting in the middle of a transaction and connecting call centers to web front ends to suppliers to payment processors. Therefore, it reasons, that anything it can do to boost the number of transactions will be potentially lucrative for the […]
By Nick Patience
OrderTrust Inc makes its money from transactions made over the web by sitting in the middle of a transaction and connecting call centers to web front ends to suppliers to payment processors. Therefore, it reasons, that anything it can do to boost the number of transactions will be potentially lucrative for the company, which is privately held. OrderTrust likes to think of itself in a separate space to the business-to-business players like Ariba and Commerce One; it says it is in the b2b2c space meaning that it enables businesses to connect to businesses and then sell things to consumers.
A few months ago it began informally introducing merchants to various suppliers of goods in a very non-web way by using the phone, but it quickly became apparent that there was the potential for a service here. At Fall Internet World in New York early next month the Lowell, Massachusetts-based firm will launch its Marketplace product, which is a way for merchants to pick and choose products they wish to sell on their web site.
Historically, says Mark Lorian, product manager for Product Marketplace, merchants have had to connect only with a couple of suppliers and a bank or other form of payment processor. That’s because it would be impractical for all but the biggest players to do much more, he says. But soon OrderTrust will be able to link them with multiple suppliers, therefore encouraging more transactions. OrderTrust’s customers, comprising merchants and catalog companies, are charged a flat fee of between $0.30 and $1.25 to use the network for what could be multiple orders within a single transaction.
OrderTrust thinks this new system will benefit merchants because they will be able to ‘cherry-pick’ items from various suppliers – and of course have OrderTrust deal with the necessary contracts and the records and other data the merchant needs to offer the items on its site. OrderTrust intends to charge the merchants to start off with, but not the suppliers, because it needs to ramp up the number of suppliers to which it can offer access. However, Lorian does not rule out levying a charge on the suppliers at some point in the future. Merchants will be charged set-up and configuration fees totaling $25,000, and a monthly maintenance charge of between $1,000 and $2,000, depending on the number of suppliers selected.
For that, merchants get access to a pre-loaded catalog-of- catalogs containing the SKUs of products split into numerous categories. Once the merchant has chosen from the web interface which products – or groups of products – it wishes to offer on its site, OrderTrust sends the merchants a database extract in whatever format their server will take – comma separated, flat files and so on – and also sends them a pre-formatted contract on behalf of the supplier. Lorian insists that this is not an affiliate marketing scheme because the merchants can set the price they charge for the product and can change the description and use whatever image they choose. They are not taking a cut for each product they sell; they buy the product and then sell it on. In other words it’s an intelligent extranet says Lorian. In addition the merchant is responsible for customer services, not the supplier.
OrderTrust is running pilot of the service with a couple of large suppliers that it says it cannot name and about half a dozen merchants, including foofoo.com and espanol.com. The pilot does not yet include the web-based interface from which to choose the products, but does include the database, catalog and brokerage services. The interface will come in the first quarter of 2000.