As e-commerce gets more complicated, it’s becoming more difficult for technology companies to explain exactly what they do.
Such is the case with Chicago-based Consolidated Commerce Inc., an upstart marketplace platform provider tackling some of the hardest b-to-b problems. President-CEO Michael Soenen sums up the company’s role this way: “We fill the gap between everything that happens after a customer submits an order and before the time the product is put on a truck.”
That covers a lot of ground, including most of the dirty work that really makes b-to-b e-commerce go.
“We’re operating a bit under the radar,” added Soenen, whose company in late October released the latest version of its CC eMarketplace Suite. “The rest of the world is focused on the hysteria of auctions and reverse auctions and on completing transactions. We know the bigger value in the b-to-b world is in fulfillment, logistics, delivery and payment,” he said. “That’s where the biggest inefficiencies are and where the biggest money is being left on the table.”
Hitting a ‘sweet spot’
Analysts are singing a similar tune. “E-marketplaces are realizing they must move beyond simply matching buyers and sellers,” said Greg Young, analyst with Extraprise Group. He added that Consolidated Commerce is hitting a market “sweet spot” with its focus on logistics, supply chain management and other services.
While Ariba Inc., Commerce One Inc. and Oracle Corp. have been dominating the e-marketplace technology landscape, smaller vendors like Consolidated Commerce have quietly been winning deals of late.
Food ingredients e-marketplace MesoMas Inc., Needham, Mass., is one of the first users of Consolidated Commerce’s new platform. MesoMas CEO Jeffrey Rosenberg said he liked the technology and attention, which included a small investment, that Consolidated Commerce could offer his company.
The vendor’s relatively low profile “was clearly an issue, no doubt about it,” Rosenberg said. “But they’ve got good technology; they’re putting some great people on our project, and they have an interest in what we’re doing.”
Andy Leung, MesoMas VP of IT strategy, added: “It’s definitely a risk going with a newer technology vendor. But the fact is that in order to be a pioneer in our space we need to be more aggressive in terms of technology.”
Soenen is hoping to attract other customers with his company’s comprehensive vision of b-to-b e-commerce. In particular, Soenen believes his company has the technology to “make the pain go away” for large manufacturers and distributors, which face perhaps the most disruptive change from the Internet and b-to-b technologies.
And it’s here that the “consolidated” in the company’s name comes into play.
What’s in a name
“Manufacturers are struggling with a lot of problems, especially that it’s expensive to serve a highly fragmented customer base,” Soenen said. “They take in thousands of small orders from lots of different customers. One of the things we can do is take thousands of pallet-sized orders and consolidate them into full-truck-load orders, and present that to a manufacturer.”
The company can also play that consolidating role for distributors, enabling them to take in hundreds of orders and have them presented as a single purchase order, Soenen said. He calls e-hub-enabled distributors “thin distributors,” because they make use of better supply chain information to minimize the inventory they have to keep in the warehouse. That’s a big boost to a distributor’s margins.
“The Internet is taking away some of the value that distributors used to provide as middlemen,” Soenen said. “Distributors need to reinvent themselves.”
Even as it is consolidating orders, Consolidated Commerce’s software is smart enough to keep in place the negotiated prices a company has with each of its customers. E-commerce shouldn’t trash those existing business relationships, Soenen said.
"The whole notion of the Internet leveling the playing field [when it comes to pricing] is hogwash,” he said. “If I’m a supplier or a buyer, I don’t want the playing field leveled. That’s not how business works—never has and never will.”