December 26, 2000, 9:55 AM

Merchant closeouts go cyber

It’s an idea ready-made for the Web: an Internet marketplace for manufacturers and retailers to trade excess inventory. Launched in February,, a spinoff of 75-year-old Gordon Brothers of New York, hosts more than $100 million in retail goods. Investors love the concept: The company recently drew $8 million in second-round financing.

“This has huge potential for the retail industry,” says Matt Sanders, associate analyst at Forrester Research. “There is such a fragmented supply chain that finding buyers and sellers for excess products can be difficult.”

Among the advantages of an e-marketplace: It overcomes high distribution costs for off-price items, moves high-volume, low-cost items easily, and connects distant supply chains. RetailExchange is free to buyers, while sellers pay $25 per listing, plus 5% of each sale. According to Forrester, sales of consumer goods via e-marketplaces will reach $29 billion by 2004. The challenge, Sanders says, is technological, with the retail industry lagging on electronic trade. “It has some catching up to do.”

comments powered by Disqus




From The IR Blog


Anna Johansson / E-Commerce

Why is social proof big for niche brands?

A small online retailer that lacks brand recognition can get a big boost from high ...


Donn Davis / E-Commerce

Technology takeover: The fashion industry is next

We are now entering the third decade of the Amazon effect, and it is just ...

Research Guides