In July 2000, Sam Zales was named president-CEO of BuyerZone.com, an online marketplace for buyers and sellers of business products and services. Prior to joining BuyerZone, Zales was VP-card marketing at American Express. Reed Business Information purchased BuyerZone in 2007.
MB: Media companies are moving into lead generation. Your business model has always been pay per lead. How does it work?
Zales: Buyers come in, read some content to get smarter about the purchase they're looking to make and, when they're ready to purchase, they fill out a request for quotes.
Buyers are matched to advertisers with a matching algorithm that have contracted to take our leads. For each RFQ, a limited number of suppliers comes up, so advertisers participate in a round-robin fashion. When the advertisers get an RFQ, they pay us a fee.
MB: What's the average purchase made by your buyers?
Zales: It varies across all of our categories, but the average is in the $10,000 range. We're now offering RFQs for more expensive products, like forklifts and tractors, so we're continually increasing the price per purchase. These purchases require buyer-seller interaction, so there's matchmaking online, but transactions are closed offline.
When buyers submit an RFQ, they're expecting suppliers to compete for their business, right?
Zales: The RFQ model works for a negotiated purchase. ...Our goal is to get businesses to purchase more efficiently and effectively and, when we do that, we make money and our suppliers make money. —M.G.