Adelaide-based start-up eSquare revealed its IT portal business plan this week and has now begun the onerous task of assembling suppliers and buyers for the online exchange which forms the basis of its revenue model.
South Australian resellers greeted the pre-launch announcement on Monday with optimism, and saw value in eSquare's online Request For Quote and Availability (RFQA) system designed to connect IT buyers and sellers.eSquare is aiming to be an online exchange with a difference, according to Daniel Kitingan, one of the two 25 year-old directors who started the company in February this year with $500,000 of seed funding.
Having achieved its business plan objectives from the first investment funds, negotiations for a second round of funding is underway with the help from PricewaterhouseCoopers.
The eSquare exchange will cater to both B2B and B2C e-commerce and, Kitingan said, a comprehensive database of "every product available in Australia" - both hardware and software - will be complete by the middle of this month.
Kitingan said eSquare is a buyer-initiated exchange. He said 10 staff have been employed for the last three months to research, develop and maintain the database content which forms a significant part of the operation.
The database is designed to be the wealth of information which will bring buyers back to the site to research their purchases and then compare the price and availability from various suppliers that can complete the sale.
All the items in the database will have links to reviews of the products, user chat lines, technical updates and related information. As a portal needs to be a whole lot more than just a market place, the site also aims to deliver IT-related news, classified advertising and IT job market, tech support chat rooms and IT product auctions.
Sellers will also be able to outsource online payment to eSquare, while an association with Web-hoster Dolphin IT's OzStores initiative will allow resellers to launch an e-commerce enabled Web site quickly and affordably.
"We want to become an online version of the traditional buyer-initiated purchase," Kitingan said. "In any efficient market place the main driving force is demand and supply, but there will still be a clear opportunity for sellers to identify their value proposition.
"What we are trying to deliver to the buyer is as much information as possible so they can make their buying decisions in the same way thy would using any other medium. That is based on price availability and value proposition.
To get around the continuing reluctance of buyers to use credit cards over the Internet, eSquare will be offering multiple payment options. Buyers will be driven to the site via TV, radio and print media advertising, as well as through promotional campaigns.
Kitingan's partner Andrew Lee said B2B trade between distributors, vendors and channel partners will build fairly quickly but he does expect some challenges in getting consumers to come to the party.
"We have some very innovative marketing plans and we are convinced that once we can get them to use the site, they will find to their liking the comprehensive nature of the content and the ease with which they will be able to submit an RFQA," Lee said.
"For the sellers, we will be able to lower the costs of customer acquisition, open up new customers and markets, reduce transaction costs and deliver quantifiable marketing strategies."
Lee said there are no costs for sellers to register with eSquare, but a 0.5-2 per cent commission will apply to sales once they are completed. Sellers are encouraged to register for the site and further pre-launch roadshows are planned for Sydney and Melbourne during November.