A SITE FOR SURPLUS TAPS GLOBAL MARKET
Byline: David Moin
NEW YORK — The field of Internet business-to-business sites devoted to the buying and selling of excess inventory is crowding up fast.
Yet according to officials from the latest entry, Rebound, excess inventory represents a vast global marketplace — roughly $350 billion each year, including $93 billion in consumer products alone — so there’s room for several players to tap into the world of production overruns and canceled orders.
“The industry is large and extremely fragmented, and Asian manufacturers cannot identify or remarket excess products to customers in North America,” said Jeremy Tang, chief executive officer and co-founder of Rebound.
According to Tang, the Asian economic crisis of the Nineties created “a huge excess problem in Asia” and provided the impetus for starting the company, which is based in San Francisco and Hong Kong. It’s geared to link suppliers in Asia and elsewhere with buyers around the world of whom they previously may not have been aware.
“We turn excess inventory into opportunity,” added James Griffis, chief operating officer of Rebound, during a press briefing on the new site.
Other B2B closeout sites on the Internet include RetailExchange.com, VirtualRags.com, WholesaleTradeShow.com, Tradeout.com, WholesaleCentral and CloseoutCentral. The Doneger Group, a leading buying office, also has a closeout site.
Rebound.com was officially launched March 9 and is principally backed by Goldman Sachs & Co. and Chengwei Ventures, a specialized China technology fund. Rebound officials declined to specify the size of the investments, or which retailers and manufacturers are participating on the site.
The executives contend they’ve put an upscale, sophisticated touch on a side of business — getting rid of the excess — that’s been “crippled” by inefficiencies. For example, they said, each buyer and seller is assigned an account manager for personalized service through the transaction process. Among Rebound’s other features is a veiled auction platform concealing the identities of buyers and sellers of merchandise. Rebound, the officials noted, also has partnered with various services and agencies to assist in cross-border trade and logistics, including inspections. Among the partners is Deloitte & Touche, which, according to Rebound, will be referring manufacturing clients to Rebound. Buyers and sellers will also have access to Wells Fargo-HSBC, which will provide online letters of credit and escrow services, as well as inspection and freight forwarding by Societe Generale de Surveillance.
Speaking metaphorically, Tang said, “We’ve tried to create a Nasdaq-type market, or sort of like an active dating service bringing people, who are in this case, buyers and sellers, together. It’s an auction-based platform.”
He estimated that the average transaction on the site would be $50,000.
Officials claimed that during beta testing, over $100 million in inventory was listed on the site and there were 840 buyers and sellers. Ultimately, the site expects to handle about $3 billion in inventory annually, involving a wide range of merchandise, from VCRs, TVs and computers to running shoes, a broad spectrum of apparel, even chicken wings, with a large percentage of the business from Asian manufacturers looking to unload surplus. Rebound gets a 4 to 8 percent commission on each transaction, depending on its size.
Tang is a 31-year-old entrepreneur who joined D.W.C. Tang Development Ltd., a private investment company of David Tang in Hong Kong, in 1992. The two Tangs are not related. At the development firm, he started several cigar distribution corporations, an exclusive dining club and became project manager for Shanghai Tang, the Chinese lifestyle brand for apparel and home products. Shanghai Tang stores were opened in Hong Kong and the U.S., including one on Madison Avenue that closed after a short period. He left Tang Developments in 1998.
Marybeth Dee is president and co-founder of Rebound. She began her career at Nature’s Gold, a jewelry firm in Vancouver, B.C., got involved in the import/export business, established her own trading company, and founded the “99 cents only” store in The Philippines before launching Rebound.