Two seafood exchanges have begun offering the online version of feeding frenzies.
Gofish.com and Fishmonger.com--Web sites that allow fishermen and fish vendors to buy and sell seafood items such as octopus, monkfish and frog legs--this month launched live auctions.
The global seafood industry, in general, has taken to the Internet like cod to land. But execs at both exchanges are betting that a combination of live auctions, a broad product selection and industry news will bring seafood buyers and sellers--who conduct $350 billion in annual sales--to cyberspace in a big way.
Portland, Maine-based Gofish.com is the elder of the two. It launched a beta site in 1998, and last November began online buying and selling in a non-auction environment.So far, Gofish.com has attracted about $40 million in venture capital and 400 customers. By comparison, Bellevue, Wash.-based Fishmong-er.com has raised $2.2 million, and has just begun offering online buying, selling and auctions.
Gofish.com launched its live auctions in mid-April. Seafood restaurateurs, fishermen, grocers, importers, processors and distributors are using the auctions, which can be planned up to 30 days in advance and last from several hours to a week. Bids can be placed anonymously.
Gofish.com has taken steps to protect its customers from being scaled by buyers with shady credit records. "You can negotiate a transaction online, and it is credit-insured," said David Weatherbie, COO.
Gofish.com arranged for the coverage through Stamford, Conn.-based GE Capital. The company, a subsidiary of General Electric Co., is also one of the investors in Gofish.com. Another key investor is CMGI @Ventures, Andover, Mass. Gofish.com has plenty of cash, Weatherbie said. "We have no plans to raise any more venture capital this year," he said.
The site features news from industry publications, and has sections aimed at various schools of fishermen. It was built mostly in-house, with assistance from Sun Microsystems and Oracle Corp.
Gofish.com, which has a second U.S. office in Bellevue, Wash., will add a third in Europe by the third quarter, Weatherbie said. Among the cities being considered are Barcelona, Brussels and Amsterdam.
A Gofish.com customer said he sees great potential for selling products over the site. "I use it to find out market information," said Larry Dore, general manager of Globe Fish Co., a Boston seafood distributor. "I will begin using it to post items, and try to sell some stuff."
Dore, however, questioned how easily buyers would adapt to the e-marketplace. "It's tough to do sales online," he said, his voice rattling against a fishmarket's din. "People need to be prompted to buy fresh fish."
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Fishmonger.com opened its auction site, Trading Floor, last week. As of mid-week, it had signed on two trading members. It intends to reel in "thousands" of traders by later this year, said Ken Wheeler, chief marketing officer.
The site will add vendor-specific sections and industry news, as well as cyber storefronts that will allow customers to buy directly from fish vendors, said Wheeler, who previously held the top marketing job at Tyson Seafood Group. These vendors will likely include Gortons Inc., Gloucester, Mass., and Van de Kamp's, a division of St. Louis-based Aurora Foods Inc., he said.
IBM Corp., Armonk, N.Y., was the main technical architect of the site, which includes instant messaging.
Fishmonger.com soon will add marine supplies and equipment procurement to its menu, Wheeler said.
Both exchanges are doing extensive advertising, mostly in seafood industry publications such as Seafood Business News and Supermarket News. Fishmonger.com intends to expand its ad buys to other magazines, such as Restaurant Business and Progressive Grocer, Wheeler said.
The question remains whether the seafood industry can support two exchanges.
"In the short term, both might work," said Carl Frappaolo, co-founder of The Delphi Group, a Boston consulting firm. "But long-term, people are looking for convenience. It is not convenient to go to two exchanges. There's a possibility they could merge, or that one will drop off."