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E Commerce Lives And Thrives
GRAND RAPIDS — While a good deal of the media still seems to write with the assumption that e-commerce has dried up and blown away, a little e-commerce company called mindpepper is growing like a weed.
Depending upon who you talk to, the firm will cross the line from start-up to profit-making by the end of this year, and possibly sooner.
Meanwhile as mindpepper busily exploits one niche, its CEO, Catherine Ettinger (shown above), said the company is locating and exploring new niches and developing other e-commerce opportunities.
For those who may have missed its announcement, mindpepper officially launched its first product — BargainAndHaggle.com — in February. It's a unique Web site.
Its purpose is to enable buyers and sellers to meet keyboard-to-keyboard and monitor-to-monitor to bargain and haggle over just about anything.
Ettinger told the Business Journal that people by the hundreds of thousands from all over the country have used Bargainandhaggle.com to sell everything from costume jewelry to homes, autos and collectors' items from the late Joe DiMaggio's estate.
"Sales range from hundreds of thousands of dollars right down to 10 cents," Ettinger said, grinning.
The way the site works is that someone who is interested in selling one or more items registers with the site and posts the item on the site. Would-be buyers then queue up by registering on the site, first-come, first-served, to negotiate a price with the seller.
If the seller and the first prospective buyer can't reach agreement, then No. 2 prospective buyer gets the chance to haggle with the seller, and so on until a sale occurs or everybody quits.
Ettinger stressed that the bargaining and haggling are live.
mindpepper's revenue derives from a percentage of each sale, the rate descending from 4.5 percent to 1.5 percent as the price rises.
The only condition attached to using the site is that the seller must use a credit card so that BargainAndHaggle can collect its commission.
"Most of the sales seem to take place by credit card," Ettinger said, "but certainly not all of them."
Ettinger says the site seems to appeal to no particular demographic group. "We had the feeling that it might be younger, computer-savvy people who were using the site," she said. "But the demographics are just like the sale items: they're all over the board."
She said she suspects many younger people are engaged in the site's large volume of computer equipment sales. But the busiest category is antiques and collectibles.
And the site has been growing at about 130 percent per month.
As of late May, mindpepper's servers were recording about 40,000 user sessions per day. A user session is a full interchange between seller and prospective buyer. All of the user sessions and other contacts, Ettinger said, add up to about a million hits a day.
She told the Business Journal that surge of traffic has required a second upgrade for the firm's servers, along with the addition of a feature that for some time to come will enable the company to add capacity and speed on the fly.
But here's the main difference between mindpepper and the large number of e-commerce industry firms that began tanking early last year: profit.
Ettinger said the company, a subsidiary of BDO Seidman, anticipates becoming profitable by the end of 2001.
She's a bit more cautious about profitability than her boss, Denis Field, Seidman's chairman and CEO.
Seidman furnished the Business Journal with a mid-May story from The Memphis Commercial Appeal that quoted Field as saying the e-commerce site will be profitable by mid-October and that he wants to take it public.
Part of what fuels their expectations is that at the end of April, Jupiter Media Metrix ranked the BargainAndHaggle site 10th among the Web's newcomer sites.
Moreover, despite what the popular media report, Internet use continues to grow (nearly 40 percent during 2000). Moreover, e-commerce spending worldwide more than doubled in 2000, approaching $300 billion and trade and auction-style sales worldwide are expected to exceed $746 billion in 2004.
The main item that has made the site a success, Ettinger says, is a program called Dinadan, which makes one-on-one price negotiations possible, in contrast to auction and fixed price e-sales.
mindpepper plans to roll out Dinadan, on which the patent is pending, later this summer. It will be available for license by businesses wishing to operate their own one-on-one negotiation sales sites.
In April, the firm moved into the Brass Works Building, 648 Monroe Ave. NW, from its original offices with BDO Seidman off Cascade Road SE.