March 20, 2000

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E-Commerce On A Smaller Scale
Package offers site creation, customer service, warehousing, and sales fulfillment

By Aisha M. Williams

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-commerce is a difficult goal for many small manufacturers, which often don't have the budgets to invest in infrastructures for Internet sales and distribution. Application service provider Ncom Group Inc. says its new outsourced services package can make the move to E-commerce easier for these companies.

Ncom's package includes creation and maintenance of an E-commerce Web site, customer services, product warehousing, and sales fulfillment. All manufacturers need to do is ship their products to Ncom, but must be willing to part with 34% of the retail price for each product sold as payment for Ncom's services. The services package is designed for manufacturers with annual revenue of $10 million to $400 million.

Joshua Greenbaum, a principal at research firm Enterprise Applications Consulting, says the combination of IT services and product management is a unique offering from an ASP. Many small and midsize manufacturers are threatened by increased global competition created by the Internet and are under pressure to get on board with their own E-commerce implementations, he says. According to a recent U.S. Census Bureau report, only 15% of about 350,000 small and midsize manufacturers are selling products from their Web sites.

"Ncom's business model is very well-designed, makes a tremendous amount of sense, and provides users with a complete solution," he says. "All they have to do is ship their products."

Nonprofit organization Kingdom Imports Inc. in Newark, Ohio, an early user of Ncom's service, works with charities to import handmade novelties from developing countries into the United States; it returns the profits from products sold to the organizations or artists that provided them. Kingdom Imports director Phil Dunfee calls Ncom's services a "turnkey operation," and he says he prefers its pricing structure to that of other ASPs he considered.

"They have a slick operation that gives us the ability to review our inventory and sales remotely via the Web," he says. "Their Web-site design is beautiful."

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