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Dell launches online marketplace

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CIOL Bureau
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ROUND ROCK, Texas: Dell Computer Corporation said on Wednesday it was entering the business-to-business marketplace arena, hooking up its own online customers with Ariba Inc.'s online B2B exchange for buying and selling office and general business products. Dell plans to bring its own customers, large and small, easily onto its own network, Dell Marketplace, by using Microsoft's software to create virtual storefronts. The network and its sellers would use Dell's own hardware. Dell also hopes to bring its customers' customers and suppliers into the network.



The Dell Marketplace will then link into Ariba's network, comprised of about 30,000 large business and medium-sized business customers. The marketplace will connect buyers and sellers of finished office supply and computer products, as well as chemical and cleaning supply products for business use. Dell will not use its marketplace to buy components for its own computers, and has shunned the use of such exchanges. Shares of Dell Wednesday rose 1/2 to $36-13/16.



The marketplace also will allow suppliers to post their product catalogues, expanding their reach to a new set of buyers who already do business with Dell and those on the Ariba network.



Dell expects the marketplace will be operational by the end of October. Dell executives said they will initially charge sellers a fee for the bundled package of Dell hardware and software, as well as for additional services provided by Lance needed to link up to the marketplace.



Buyers would be charged a percentage fee per transaction. The percentage would be will depend upon the size of the deal, Dell said. However, Dell executives said they would phase out the transaction fees at a later date, depending upon the market and instead generate revenue from the additional services and products, such as payment and financing.



"Customers and suppliers, they don't want to pay tolls forever," said John Hampton, Dell director of new ventures. He declined to disclose the amount of revenue Dell expects the marketplace to generate as well as the amount Dell has invested in the project.



"We can say investment has been significant enough to bring a very strong and viable solution to the market," added Dell spokesman Ken Bissell.



Using technology from privately held Austin-based Exterprise, the Dell Marketplace also will allow companies to buy products more complicated products than the standard fare offered almost as commodities over traditional B2B exchanges. It also will allow sellers to know their customers' needs, an alternative to pitching a price and a product to the open market.



The Exterprise technology sets up e-Showrooms where suppliers can showcase their products, displaying features and benefits, rather than just price. Dell said its marketplace is an improvement over traditional B2B marketplaces, where searches are driven purely by price.



Dell said suppliers that have signed up for the Dell Marketplace include Pitney Bowes Inc., Motorola Inc., and Minnesota Mining and Manufacturing Co., maker of 3M products. In addition to the showrooms, the technology will allow the interested parties to negotiate deals, setting price, conditions of service and delivery.

(C) Reuters Limited 2000.

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