Ebuyxpress.com Inc., the operator of a new business-to-business Web site, has set its sights on alliances with professional organizations rather than prospecting for customers on a smaller scale.
The Dulles, VA-based company, which markets basic maintenance, repair and operations (MRO) products, works on the theory of being a “virtual distributorship” of these supplies. Visitors to the site (www.ebuyxpress.com) can get discounts of about 20% by ordering directly from manufacturers, according to CEO Chad MacDonald. “We don’t have the costs associated with brick-and-mortar operations,” he says.
Ebuyxpress is seeking contracts with large associations that have significant buying power so it can lock up their markets at an early stage. It already has a deal to be the exclusive supplier to Professional Apartment Services, a group that handles maintenance for 4,700 apartment buildings and spends some $60 million a year on MRO supplies. And, at press time, Ebuyxpress was negotiating with an association that performs MRO functions for universities and spends about $1 billion annually.
The company is planning a massive marketing effort that will include appearances at trade shows and advertising in industry magazines. To further build the business, MacDonald intends to draw on contacts he’s made from 1 7 years in the MRO industry.
Ebuyxpress charges a commission of around 20% on each sale, which MacDonald insists is cheaper than buying MRO supplies from distributors.
The firm has lined up 600 manufacturers, including General Electric, Sherwin-Williams, Whirlpool, 3M and Rubbermaid. Among the product lines are appliances, building materials, computers, and electrical, plumbing and landscape supplies.
Site users can have their own electronic “catalogs” created in a manner similar to Web site shopping carts, which bookmark products customers buy frequently. Fulfillment is handled by each manufacturer.
MacDonald predicts the firm will pull in about $75 million in revenue this year, which he hopes to boost to $500 million in 2001. But, he concedes, it will be an education process to get these companies to conduct business the electronic way.
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