AFTER FIVE YEARS of running a firm that recycled PCBs from places like the Hudson River, Brin McCagg thought it was time to try a less toxic form of recycling. He formed TradeOut.com, a firm that brings together buyers and sellers of obsolete or used commercial and industrial equipment.
So far so good: during its first three weeks of business in May, the Ardsley, NY-based company accrued $20 million in assets, says marketing vice president Dermott Ryan.
Sellers are charged fees of $10 to $20 to list items on the site. Products can be offered either for auction-in a format similar to eBay.com-or for sale, says Ryan. TradeOut.com gets a 10% to 20% cut per transaction.
Companies that have offered equipment for sale include Ralston Purina, Weyerhaeuser, Georgia-Pacific and Reckett, as well as Florida Power & Light and other utilities buyers, including wholesalers, liquidators and jobbers.
Ryan wouldn’t project revenue figures but was optimistic the company could get a piece of the $300 billion worldwide market for liquidated inventory, most of which comes from the United States. The company claims negotiating the sale of excess inventory and idle assets is typically an unstructured process based on telephone sales, communicating detailed specifications for individual products and negotiating multiple sales. This means an average of four calls to close a deal, resulting in an approximate total cost of $1,200 per sale.
“Companies typically spend a lot of time doing this,” notes Ryan.
He was hard-pressed to pin down an exact percentage of money companies would save using its system, since it varies by industry and some products just don’t have very wide appeal-like the mining equipment listing TradeOut.com had just posted at press time.
To get the word out, TradeOut.com mailed over 100,000 pieces to both potential buyers and sellers using standard industrial classification (SIC) codes and other criteria to determine which industries would be the best prospects for buying and selling obsolete equipment.
The company is targeting both high-level executives like chief financial officers down to procurement officers at Fortune 1000 companies, says Ryan. TradeOut.com is also using a sales force of 30 people travelling around the country pitching this service.
At deadline Tradeout.com was planning an “even more aggressive” advertising and direct mail campaign later this year.
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