Online exchange breaks B2B mould

"We're not just another b2b exchange site." And so began Stuart Wischhusen's careful explanation of a new Sydney-based business-to-business online exchange, b2bBuyer.com.au, expected to launch in October.

The "chief initiatives officer" and company founder believes the SME customer base needs the economies of scale available via online buying groups established on its Web site.

Simply put, b2bBuyer.com.au targets small-to medium sized enterprises of all industries that seek to achieve low supply costs through combined mass purchases.

For no charge, purchasers can secure a spot on the b2bBuyer portal, where they can join "buying groups", Wischhusen said, jesting that Internet buyers and sellers typically regarded online transaction fees as "a bit of a rude question".

And why will this e-commerce model work? "Because it's inevitable," is Wischhusen's retort.

Buying groups can haggle with suppliers over prices independently of b2bBuyer. The site will draw revenues from an unfixed charge to suppliers of around $100 per month, Wischhusen said.

Wischhusen believes the cost of participation for a supplier in b2bBuyer - at roughly $1200 per year - is a more productive business investment than running the "poxy little" Web site he said would be attainable for a similar cost.

"SMEs can't afford IBM. They can't afford Telstra coming in to tell them what to do. They would laugh at the hourly rates," he said.

Wischhusen says his research also suggests around 60 per cent of all Australian companies are not suited to online catalogue-based trading, so the opportunity to form or join buying groups on the Internet will be welcome, he claims.

"People can't compete with dot-com marketing budgets," he said of the problem with individual online efforts.

Meanwhile, the portal conducts a "360-degree" supplier feedback and ratings system, which Wischhusen expects will encourage participating sellers to maintain high standards of service.

No participating suppliers have been announced for the venture yet, but Wischhusen said a significant number were expected to be on board by the start of business. Initial buying groups are expected to comprise various rural local councils, he said.

Long-term plans for the company include listing on the Australian Stock Exchange and launching application service provider (ASP) offerings to larger enterprises.

The company is jointly funded by Wischhusen and his two partners, Anna Samios, "chief profitability officer", and George Alifierakis, "chief reality officer".b2bBuyer.com.au has also formed an alliance with Zwirl.Com, an existing US-based buying group which is supplying the company with much of it's technology.www.b2bBuyer.com.au

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