n 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?
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?
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?
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.