E-Commerce Still Kicking For This Online Liquidator - Twice

E-Commerce Still Kicking For This Online Liquidator

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BOSTON — Amid the dust that's now beginning to settle from the e-commerce shakeout, RetailExchange.com is one of the few b-to-b closeout sites for consumer goods that's still standing.

Though born moments before the tech bubble burst some 16 months ago, the company has survived and thrived while kindred exchanges like CloseOutNow.com and Rebound have failed, and TradeOut.com dropped consumer products.

By contrast RetailExchange has expanded its purview by adding consumer electronics to its mix in January under the supervision of former Wal-Mart senior buyer Rick Sarcione. Since then, the category has come to represent 20 percent of its product offerings, and has grown into a multi-million dollar business that now surpasses apparel and home products as its No. 1 seller.

One of the reasons for its success is its pedigree: The company is a spin-off of Gordon Brothers Group, a major liquidator that handled the recent closeouts of Wards and Bradlee's, and which provides RetailExchange with both credibility and capital.

The merchandise itself is largely off-price goods that are offered by manufacturers that have included GE, Gran Prix Electronics, SDI Technologies Sanyo, Sharp and V-Tech. The vendors can choose to be anonymous and can protect their brands by limiting their online listings to certain geographic areas, distribution channels or specific retailers, all of whom are screened, qualified and registered.

Negotiations over price, payment and logistics can be conducted privately online or via RetailExchange's 30-person direct sales force, although the company also provides delivery options via FreightQuote, escrow arrangements through Pitney Bowes and credit and factoring services through CIT Commercial Services.

Registration is free and there's no charge to list merchandise, although RetailExchange collects a 5 percent commission from the seller on all transactions. Member buyers, who run the gamut from mom 'n' pops to regional players to national chains, can drill down through the site to find specific products, and can receive e-mail alerts when new listings are added. The company also opened a New York City showroom earlier this year where merchants can see and purchase goods.

"It provides quick sourcing solutions for retailers who can find brand name products on the spot market and lower their inventory risk," observed Jason Kissell, director of marketing for the online exchange. "It also allows non-CE retailers like supermarkets and pharmacies to add boom boxes, radios and other small electronics to their assortments for use as specials and end-cap displays."

Retailer reaction has been positive. Said Rolando de Aguiar, senior VP of regional discount chain Ames Stores, "The revenue potential of goods bought through RetailExchange could be as high as $300 million. We have been able to find deals for our Special Buy area which in turn results in greater value for our value-seeking customers." Added John Reier, president of Southeastern off-price chain Fred's, "Our buyers need to stay on top of the excess market, and RetailExchange has significantly expanded the spectrum of great deals we see."

Manufacturers are also pleased. According to Jim Collmeyer, VP/sales at Gran Prix, a low-end CE supplier, the company was able to avoid auctions and find a buyer for excess CD and children's home audio products in less than two weeks on the site. "In addition to selling these excess products quickly, we sold them at a price we were comfortable with," he said.

The next goal said RetailExchange's Kissell, is attaining profitability, for which the privately held business is on track, given its consistent monthly revenue stream and winning business plan. "It's a better way and a safe way to get rid of excess product," he said.

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