With any of these B2B websites a buyer will be able to easily source products from, say, Taiwan, and all without journeying away from the PC.
Quite apart from the benefits to big companies of less international flights, these websites will make it easier than ever before for small players such as individual IBDs to source their own products from overseas. Youll still need letters of credit and products will still be on the water for ages but, for instance, with downloadable CAD images of key new products youll be able to spec your bikes digitally. Its a whole new ball game.
Three B2B websites are fighting it out to see which will become the industrys main vertical trading website. Two are based in Taiwan and were launched at the Taipei show. The third is run from Dublin and is planning to launch in time for Interbike. These sites allow buyers to find suppliers without having to go to the expense of travelling around the world to source product.
Its strange there are no US-based B2B global bike industry sites and now the time has passed when venture capital would be available to incubate such ventures. B2B sites of all kinds were hit hard by the recent devaluations in IT stocks, especially in America.
High flying multi-industry B2B enabling sites such as Commerce One, VerticalNet, PurchasePro, FreeMarkets and Ariba were recently nicknamed boom-to-bust sites and although their stocks have since recovered some ground, B2B is no longer seen as a dead cert investment even though the concept clearly has an important role to play in the future.
B2B websites which focus on one industry came off even worse in the recent mauling of IT stocks. Sites such as eMerge Interactive (cattle), Neoforma (medical supplies), and Sciquest (lab equipment) were almost wiped out overnight as the financial markets woke up to the lacklustre short-term profit potential of industry-specific B2B players.
B2B for bikes
Its against this volatile background that two global bike trade sites have launched and one is about to. Its a web maxim that probably only one will flourish. The three sites are bicyclesb2b.com (Taiwan), bikexpo.com (Taiwan) and bikemaker.com (Ireland).
An all-singing, all-dancing B2B website for the bike trade would certainly do well once established it would allow international trade with a lot less international travel but its difficult to see how the three current contenders will ever make the kind of money necessary to pay back the initial investment, cover the running costs and net a tidy enough profit to make all the slog worthwhile.
This is a view shared by Michael Gamstatter, editor of the American trade magazine Bicycle Retailer & Industry News. In an email to BikeBiz he said:
The key is making money. That seems to be a mystery for most everyone. Smart e-tailing is B2B, but so far lacks supplier support, but that may change.
Middlemen B2B websites make some of their money from taking a cut of any deal done. Other revenue streams include advertising, licensing, and sponsorship and there may also be a fee charged to suppliers for adding an online version of their full product catalogue or for producing web-safe CAD drawings of components.
According to International Data Corp., the B2B e-commerce industry is expected to grow from $200 billion this year to $2.5 trillion in 2004.
Of the three bike industry B2B sites, this one from Ireland is the most ambitious, and the one dripping with the most bells and whistles. But its also the one with the most expensive running costs killer apps dont come cheap. It has a list of features that would be genuinely useful to a great many internationally-focussed bike suppliers and buyers.
It only has a data-collecting holding page up on the web so far but Bikemaker.com promises much. Its the creation of, among others, Tom Kavanagh, an industry journalist and consultant, and is self-supporting. The Taiwanese sites are almost front-ends for existing businesses, Pacific Cycles in the case of Bikexpo.com and Tradewinds, in the case of BicyclesB2B.com.
Current market and competitive conditions in the bicycle industry suggest that profit levels are more likely to be maintained through cost savings rather than meaningful sales growth in the short term, Bikemakers Kavanagh, a former writer on Cycle Press of Japan and a current contributor to Bike Europe, told BikeBiz.
We believe that although the bicycle industry is relatively small, bike companies deserve the very best in security and features, and that is why we are committing very substantial investment in the creation of a world-class system backed by the resources of the leading technology firm. The system that we launch will offer substantial benefits even for large buyers, with the ability to easily manage on-contract purchases: it's no longer enough to simply present an on-line catalogue.
We are also partnering with one of the world's leading media firms, which will provide bikemaker with a global marketing reach, as well as up-to-the-minute news and other content.
No prizes for guessing that one, although no Ts have yet to
We recognize that we need to have a truly functional product that
comprehensively lists all available products, worldwide. While Taiwanese companies are undoubtedly the leading suppliers to the quality bicycle industry, let's not forget that there are strong indigenous manufacturers in many countries who offer excellent products with far shorter lead times. Price is not always the determining factor in purchases.
Kavanagh stresses his sites independence and is dismissive of the Taiwanese B2Bs which he believes are fronts for existing businesses with interests to serve:
We think that in order to be successful, a B2B exchange must be seen as independent of any particular trading bloc or prominent industry player: our approach from the beginning has been one of broad partnerships rather than allying ourselves with sectional interests.
Central to Bikemaker.com will be a massive and constantly updated database of bicycle components.
This centralised product information source will offer benefits to users in terms of cost, time and convenience. For example, a bicycle assembler could use the site to instantly find every possible supplier of yellow leather racing saddles with titanium rails, weighing under 250 grams. He will be able to evaluate each potential supplier for reliability and suitability as a trading partner. He can then broadcast (anonymously, if desired) a request for quotations to all qualifying suppliers, and order, pay for, and track a component shipment through the website.
An auction facility will allow companies to sell excess inventory on the global market (also anonymously, if preferred). Theres also going to be a reverse auction facility which will allow visitors to put orders out for tender.
One of Bikemakers key USPs is its bespoke component visualisation software. Bike bits either new or forthcoming can, for a fee, be made into digital 3D images that potential buyers can download and use in their own CAD systems to check on compatibility.
This would represent a huge saving in time and expense for large suppliers but doesnt come cheap. Bikemaker.com probably needs £1m to get all its headline making features off the ground.
If funding is forthcoming and the launch takes place, Bikemaker.com would be a seriously impressive business tool.
Kavanagh is aiming high: The ultimate goal of Bikemaker.com is to be the gateway for XML-based online supply chain management: buyers and suppliers will be directly linked into the relevant parts of each other's IT systems. Bikemaker.com intends to set the software standards to enable this to happen.
Larger enterprises will benefit from an open standard for integrating their ERP systems with their trading partners, in order to manage on-contract purchases far more efficiently.
Future features will enable you to complete your entire order online, verify order status, track the progress of your shipment and complete an online receiving order triggering payment to your suppliers.
Bikexpo.com says it offers bicycle companies a more cost effective and easier way of doing business.
The site was developed by Hometec EC Service Inc. of Taiwan, which is part-funded by, and allied to, bike maker Pacific Cycles.
At Bikexpos heart is a product locator search engine. Signed-up members also get an email service, a customisable web page and can post want to buy (ie reverse auction) notices. The website also features industry news, although not a great deal has been added since the Taipei show.
But the real power of Bikexpo is reserved for paying customers, claims George Lin, owner of Pacific Cycles, an industry figure for the past 30 years and one of the guiding lights behind Bikexpo.com.
It puts e-commerce in the hands of bicycle businesses at a fraction of the cost of other systems on the market. Bikexpo features a fully user-customisable intranet system, an online product catalogue that can be modified by customers at any time, at no extra expense, and a powerful Message Centre.
A number of firms are offering business to business e-commerce/intranet services but in our experience it is very time consuming, difficult and expensive to set up even for large companies, especially if the service is to be industry specific. Ours is not an off-the-shelf package. We have spent two and half years developing this.
Bikexpo evolved from Pacific Cycles intranet system, set up to network with customers and suppliers.
Working on the site as a Hometec employee is Taiwan-based Stephen Jack, the former editor/publisher of the recently discontinued Austral Bike Book, the Asia-centred product finder and news source.
He emailed BikeBiz with his take on what Bikexpo is all about:
Bikexpo essentially has three levels of access or service. The first, is universal access (no sign up necessary), open to anyone in the bicycle business who can search the database for companies and products as well as read industry news and trade postings. The second level is membership, which is free, but restricted to companies involved in the supply side manufacturers, distributors etc. Members get a customisable web page, an email message centre and can post press releases and want to buy listings amongst other things. The third level of service is fee-based.
Bikexpo sets clients up with a very cost effective and easy to use intranet system. It allows clients to allocate intranet accounts to key customers and suppliers enabling all communication such as enquiries, ordering and account tracking with Bikexpo. Clients also have their entire product catalogue - photos and specs listed in the Bikexpo database, which is entirely controlled by the client, so it can be modified at any time.
Bikexpo has an entirely international focus. We have already signed a number of manufacturers and have received a lot of interest from others.
Bikexpo is testing until early June so some features, i.e. news, are not laden with content yet. We are fine tuning the engine polishing the upholstery will come very soon.
Bikexpo clients [will soon also be able to] upload CAD drawings, including those in 3D, to their Bikexpo websites where they can be viewed and manipulated, even without CAD drawing software, by Bikexpo members. Similarly, clients can send customers 3D drawings via Bikexpo's Message Centre for viewing.
Jack bristles at any assertion that Bikexpo is either a front or a spin off for Pacific.:
Bikexpo is not some marketing ploy so that Pacific Cycles can sell a few extra bikes. Nothing could be further from reality. Too much time and money has been spent on this project for that that kind of indulgence.
True, Pacific Cycles is one of the investors in Bikexpo (along with others, including investors from outside the industry) and, true, George Lin of Pacific is president of Hometec. We have been open about this from the start and why wouldn't we be?
Bikexpo is not a "front" for anything. We are an independent company, with our own staff and office, which by-the-way, is located two hours drive away from Pacific. Our only business is B2B for the bicycle industry and as such we intend to serve our constituency well.
This site had a headstart on the data collection front, its a rebadged and revamped version of the Trade Winds web site which in turn is a digitised version of the Trade Winds product catalogues which, for the past 25 years, have listed virtually every bike product produced in Taiwan.
BicyclesB2B.com is owned by AsiaTradeMart.com Pte. Ltd. which aims to set up 21 B2B portals. The bike portal contains data on 1200 companies and their products. The great majority of the companies listed are from Taiwan.
AsiaTradeMart stated aim is: Assisting overseas buyers to conduct systematic and efficient personalized online searches to locate suppliers who can fulfill their sourcing requirements. Enabling suppliers to make timely business contacts and increase their exposure on the global marketplace by employing our online inquiry and price-quote system.
The price-quote system is not yet operational on the bike site.
To make itself stickier bicycleb2b.com like the other two sites also carries industry news. In addition theres a monthly column from one of the bike industrys most respected consultants, Jay Townley of the US.
Townley is affiliated with Trade Winds and helped with the structure for bicyclesb2b.com.
He told BikeBiz that B2B sites will prove themselves to be increasingly useful because they give time-poor bike trade execs much of the information they would normally have to travel to Taiwan to glean:
Making money is dependent on the services offered and how such services are accepted and utilized. In the case of the bicycle industry B2B sites, it will be the specific services and connectivity they provide. Today product managers and marketing managers have to travel to the Pacific Rim several times a year to develop a model line. Bicyclesb2b.com has the potential of providing much, it not all, of the information that is the yield from at least one trip - thus saving product managers time and companys expense.
The editor of bicyclesB2B.com is Laurie Brucker. She emailed BikeBiz with her sites USPs.
We invite both bicycle buyers (global) and suppliers (at present only Asian suppliers) to join our web site. Membership for buyers is free. All they need to do is fill out our simple registration form, which requires choosing a username and password. Becoming a member allows buyers to access our specially designed Electronic Personal Digital Assistant (ePDA) features such as contact list, bookmarks, email account, etc.
As we are still developing our site, for the moment we will market the site to Asian suppliers, with the future goal of expanding to global suppliers as well.
Buyer membership is free. There are several levels of supplier membership. The basic free level for suppliers includes many advantages, such as a basic web page for each supplier and an online product catalogue with a select number of items. Currently we are developing the upper levels of the supplier membership programme, including the exact price structure. These should be finalized within the next few weeks. However, some of the upper levels will allow for expanded advertisements by suppliers, in order to reach a greater audience. Additionally, we will continually be adding to the features of the site during the year, with the goal of providing professional Internet trade transaction services within this year.
Competition is definitely heating up in the bicycle B2B market. However, we believe that based on the long-standing history of [Trade Winds] relationship with the bicycle industry, combined with the rich content, robust technology and new functions that we will provide on the site, bicyclesB2B.com will come out ahead.
Our goal is for bicyclesB2B.com to be an easy gateway to the world of e-commerce, helping customers lower their costs of business and facilitating their interaction with prospective trading partners.
We will of course strive to provide the best service possible to our customers, but ultimately it will be the decisions of buyers and suppliers who determine if there is room for more than one bicycle B2B site.