September 15, 1997

Web Site To Host Auctions Of Surplus Technology Targeted bidders: IT groups, resellers By Clinton Wilder nline auctions have proved to be one of the most successful formats for consumer commerce on the World Wide Web, but can they work for business-to-business electronic commerce? A startup called FairMarket Inc. is about to find out. FairMarket this week will launch a Web site that will host online auctions of surplus lots of PCs, electronic components, and chips to corporate buyers. The first live auction is slated for the fourth quarter. "We think auctions can work well for business-to-business," says FairMarket founder and CEO Scott Randall. "Sellers get the highest return because open bidding drives the price up. And buyers get a good deal because, by definition, they won't pay more than they want to." FairMarket will make its money on transaction fees-1.5% for the buyer and 9% for the seller. There's already some business-to-business "bidding" on the Web, but it's actually done by sellers trying to land corporate procurement contracts-and the winner is the low bidder, not the high one. Some divisions of General Electric Co., for example, accept bids on contracts from potential suppliers through the TPN Register Web site operated by GE Information Services in Rockville, Md. Digital announced last week that it will work with US West to deploy a similar Web site for bidding on federal government contracts. But FairMarket is believed to be the first site for bidding by corporate buyers. Here's how it works: A seller has a surplus inventory of a product such as network interface cards. The com pany will telephone FairMarket with the lot size, specs, and minimum bid it will accept. The seller then ships the lot to a Federal Express warehouse in Memphis, Tenn., where FairMarket inspects it. FedEx will handle all logistics, warehousing, and distribution. FairMarket then posts the lot information on its site and would-be buyers have three days to submit bids. Both the seller and the buyer are anonymous; buyers are identified by account number and password. The winning bidder, after being notified by E-mail, has 24 hours to wire payments (not via the Net) to FairMarket's depository holding account. FairMarket's target buyers are corporate IT departments looking for low-end computing gear, as well as value-added resellers and systems integrators. Back to News in Review Send Us Your Feedback Top of the Page

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