The U.S. Department of Commerce’s U.S. Commercial Service has joined forces with technical partner IBM Corp. to create a site designed to make international sales easier.
The buyers represented on BuyUSA.com—1,500 domestic companies and 14,400 foreign businesses—hold purchasing power that exceeds $58 billion. Officials at the U.S. Commercial Service, created 21 years ago to foster exports by small and midsize businesses, expected even greater participation prior to the Sept. 11 terrorist attacks.
Launched on Oct. 9, the Buy-USA.com site is best described as an eBay for b-to-b exporters. It allows U.S. businesses to easily establish Internet stores to serve foreign buyers.
Corporate users fill out forms in order to be qualified by the U.S. Commercial Service as a buyer or seller. Once qualified, they can create and search catalogs.
IBM acts as intermediary, managing the entire network’s technical operations.
U.S. subscribers pay a fee of $300 to $875 a year to maintain their store and process transactions through the site. International buyers pay nothing.
Thorp Minister, owner of Export Los Angeles and a subscriber to BuyUSA.com, said in recent weeks the site enabled his shipping company to land an order from a Hong Kong importer that could end up being worth as much as $500,000.
"The primary benefit is it allows me to focus on shipping goods, rather than looking for customers," Minister said.
The site is an important marketing tool for IBM’s WebSphere server software. It’s a prime example of a highly scalable, global network being run on the software and will be closely watched in coming months, said Ed Harbour, director of WebSphere Commerce at IBM.
Many BuyUSA.com participants are expected to be approaching Web sales for the first time, and their exposure to a WebSphere-based system will make them more likely to go with IBM’s platform as their Internet business develops, Harbour said.
"Ideally, we would want every business doing business on BuyUSA.com to convert to WebSphere, but, to be fair, we are not using this site to [overtly do it]," he said.
Not everyone is sold on BuyUSA.com’s model. Browning Rockwell, president of Trade Compass Inc., a Washington-based trade adviser, criticized the site, saying it will compete with private exchanges designed to facilitate international trade and could crimp private enterprise if it gains widespread adoption.
Freeing up agents
Dave Barry, director of communications for the U.S. Commercial Service, said the site should eventually allow the agency’s experts to concentrate more on providing strategic advice to companies rather than dealing with the nuts and bolts of transactions.
The most vital issue concerning BuyUSA.com has been getting the word out about its value, Barry said.
"We’ve experienced caution and a conservative approach by small business," he said. "Some are reluctant to make the investment because of concern over what happened Sept. 11. Our argument is that this is the best time to take the plunge into e-business. The business cycle is low, but it will come back. This is a great opportunity to make an investment in international development at low cost."
To spur adoption, the U.S. Commercial Service plans to work with trade associations in various industries to inform their constituencies.