Overseas companies know they offer American companies cheaper services and pitch themselves accordingly: "What if you could get your ideal product finished, without cutting corners, for half the cost or less?" asks Rohit Bafna on the Web site of CyberAds Studio, a company in India that creates and designs corporate Web sites.
Shopping overseas, to be sure, is still not a breeze. Global business originates from 200-odd different jurisdictions, and the explicit and implicit agreements that define a good business relationship--everything from commercial codes and export law to expectations about how quickly a company will pay its bills--vary widely among cultures and are often unarticulated.
However, new resources supporting easier and more efficient business-to-business trade appear on the Web almost weekly. For example, General Electric Information Services, a global leader in electronic-commerce services, and Thomas Publishing Co., publishers of the Thomas Register of American Manufacturers (also known as the green book), recently started an on-line company called TPN Register, headquartered in Washington, D.C. (www.tpnregister.com), that uses the descriptive line-item detail and product headings of Thomas's green book to standardize on-line trade communications.
Vendors looking for credit reports can download them from Dun & Bradstreet in a minute (www.dnb.com). Often the first phase of due diligence can be completed with information available on a potential customer's Web site. Vendors requiring regulatory information and national-standards specifications can copy the information directly from government or association sites, instead of waiting weeks for bureaucracies to turn around a paper request.
And there are newsgroups and mailing lists all over the Web with ongoing conversations about trading tactics. (To get a good overview, visit www.dmintl.com for the list that Craig Snyder put together.)
Perhaps the most ambitious of the resources is Jalinous's Unibex, which offers one-stop on-line shopping for the full range of trade services, from market research to settlement. The U.S. Chamber of Commerce (www.uschamber.org) is so enthusiastic about the system that later this year it will offer Unibex memberships at discount rates as part of a package of services to its 215,000 members. (To reach membership services, call 800-649-9719.)
Here's how Unibex works: A manager interested in shopping on the Web for a product or a service connects to the Unibex site and then downloads a client-communications program. The client guides the manager through the creation of an offer, prompting him or her to specify details such as geographic restrictions, vendor qualifications, and payment methods. All the decisions are made from standardized pull-down menus or by clicking on keywords, making it easier for parties who are new to the process or for whom English is not a first language to follow the transaction.
When the entire bid has been defined, the server searches for matching offers. If any are found, the parties negotiate by revising one another's offers with the same menu sequences.
Companies can bid for supplementary services like accounting or logistical management in the same way. Due diligence is supported with international credit services like Dun & Bradstreet or localized, specialized services or agents working directly for Unibex. None of those services replace personal phone calls or visits, but they are a starting point. Unibex agents conduct interviews and inspection visits, and arrange for audits. Companies pay Unibex a flat fee of $1,000 a year, which includes the development of a company Web site.
Robert Wan used the system recently to find a source of hiking boots for his company, Master System, a sporting-goods distributor based in Arcadia, Calif. He knew that Canadian manufacturers had a good reputation for boots, but he didn't have relationships with any companies. In the old days, to find the right supplier, he would pay a sales rep or go to a trade show--both costly in time and money--or paw through directories of manufacturers put out by trade associations and then play phone tag with random suppliers. Recently, he simply posted a bid through Unibex and found suppliers in Quebec and Montreal in less than a day. Wan is delighted with the process, which he finds much faster than his old method of cold calling.
Companies also will have to compete through quality on-line customer services. The companies that win big will be those that manage to make the on-site experience so inspiring that prospective customers lose interest in clicking farther down the list of on-line competitors. Sites have to offer product specs, application information, standards and regulation archives, frequently asked questions, downloadable software tools (like costing programs), mailing lists, references, company data, and so on.
An important emerging trend is to offer a catalog out of VRML (Virtual Reality Modeling Language) files, which allows customers to inspect products by rotating 3-D images on-line. VRML files have the added attraction of being downloadable so that customers can reuse them in their own information chain, sending them to manufacturing, training, or inventory departments in-house.
Americans, though, have no monopoly on this strategy. One of the first industrial-supply companies to offer VRML images on its Web site was Teldor Wires and Cables Ltd. And the headquarters of Teldor Wires and Cables is Kibbutz Ein Dor, in Israel.
Returns: Foreign Competition's Upside
The Internet brings a slew of new competitors into the American marketplace. But it also opens up numerous doors for Stateside businesses. Consider these benefits:
- Access to the world's vendors makes it easier for you to get the products and services you need--at lower cost.
- You can form partnerships with the best companies in the world.
- Fast, bureaucracy-free, business-to-business services, from market research to settlement, are at your fingertips. Your response to increased business from overseas will likely make you more competitive at home.
Fred Hapgood (fhapgood@world.std.com) is a freelance writer based in Boston.
