Need2buy.com has been busy taking care of its own needs to find manufacturers interested in buying online.
The company – an online industrial marketer of electrical components in Westlake Village, CA – recently acquired MDC Electronics, a Chicago-based major electronics parts distributor, to give it a steady fulfillment operation.
To establish a European presence, the company opened an office in Germany in December.
And to gain a foothold in the lucrative Pacific Rim market, Need2Buy formed a joint marketing and sales venture with Japanese industrial giant Mitsubishi in February.
The one-year-old firm is staking its future on the “reverse auction” process. In these auctions, original equipment manufacturers (OEMs) looking to acquire components post a request for proposal on the company’s site (www.need2buy.com).
With those requests in hand, different vendors who feel they can meet the criteria can quote prices for the specified components and individuals can compare the quotes.
“Unlike auctions on a site like eBay, where people offer products for bid and the prices go steadily higher, here OEMs specify the parts they need and several suppliers can offer them at different prices,” says Need2Buy’s business development manager Aresh Patel.
Patel claims that obtaining parts through this method can save companies from 20% to 50% of the cost of manually phoning distributors who may or may not have all available parts on hand at a given moment.
So far, the firm has lined up about 5,000 OEM customers using direct response print ads in trade journals, such as Electronics Buyers News and Purchasing magazine. Each of its participating OEMs, notes Patel, turns over several million dollars a year in business.
The company makes its money through varying distributor markups from MDC, notes Patel, who declines to disclose revenue goals.
Later this spring, Need2Buy plans to launch a more ambitious direct response advertising effort including direct mail campaigns, outbound telemarketing and additional print ads in financial publications like the Wall Street Journal and newspapers like the Los Angeles Times.
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