An entrepreneurial B2B e-commerce services company wants to test a pair of age-old adages. The first: timing is everything. The second: it’s better the second time around.
In 1999, Terrecom LLC in Omaha launched a B2B exchange aimed at matching online business buyers with sellers in diverse vertical markets. The year was the early heyday of B2B e-commerce and big exchanges in big industries from automotive to aerospace were launching, led by some of the biggest companies in a market such as General Motors and Ford in automotive and Boeing Co. in jets and airplanes.
But the timing for such exchanges and portals was premature and in most industries never took hold for a variety of reasons, including a lack of buyers, sellers, connectivity and e-commerce technology and the dotcom crash of 2000 and 2001. After building up its B2B exchange to about 3,000 buyers and sellers, Terrecom folded its operation. “We were before our time,” Michael Brandon, Terrecom’s vice president of business development, says.
Now Terrecom is using lessons learned from the past coupled with a new marketing and sales plan with the aim of launching Gjoa.US as a B2B exchange sometime later this summer or early fall. Gjoa—a name taken from the ship used by Norwegian explorer Roald Amundsen—will debut with about 52 categories ranging from apparel and building and construction to travel.
The platform will be built using e-commerce technology from Magento, which is set to be acquired by Adobe Systems Inc., and will feature what Brandon calls such “B2C” features as a shopping cart and the ability to make an immediate purchase of available products. “The Gjoa shopping cart system is in place for instant purchasing of ‘fast-moving’ items,” Brandon says.
The Gjoa exchange also will feature advanced search and give buyers a request for multiple price- quote tools and features for developing escrow accounts for higher-priced products. Gjoa plans to operate internationally, but to generate most of its immediate transactions in the United States. “The world wasn’t quite ready the first time we did this and our technology was in need of a facelift,” Brandon says. “We wanted the B2B world to catch up.”
With Forrester Research predicting the B2B e-commerce market could generate sales of as much as $1.2 trillion in as soon as three years, Gjoa decided now was the time to take a fresh run at building a multi-industry B2B portal.
To build up and sign an initial base of buyers and sellers, Gjoa is working with various city and state chamber of commerce organizations and related associations to recruit users. Those organizations, which Gjoa didn’t identify, will be offered affiliate revenue sharing based on the number of users they help to recruit and sign up.
“We are also reaching out directly to a variety of companies in various industries and offering them a significantly discounted seller registration to be among the first to register, in order to populate the site with a wide variety of products and services from the start,” Brandon says. Gjoa didn’t say which companies it was targeting.
Gjoa will be a free service for buyers. Suppliers will pay a yearly fee of about $150 and a per-transaction fee of 2.5% of transaction value. “This is very competitive and significantly lower cost compared with foreign B2B marketplaces in the headlines,” Brandon says. “Gjoa can complement a company website or in-house e-commerce site.”
Gjoa has ambitions of registering 10,000 users over the course of the next few years. But for now, the focus is getting the launch of the exchange complete. Goja is also keeping a close eye on security. “Companies and their products will be carefully screened from the start as they come on board, to prevent influx of any counterfeit products, and will be monitored ongoing by an in-house security team,” Brandon says.
Originally published in Digital Commerce 360 by Mark Brohan on June 15, 2018 and can be seen at https://www.digitalcommerce360.com/2018/06/15/an-old-b2b-exchange-gets-a-new-lease-on-life/