Geeknet terminates a purchase agreement with Hot Topic and accepts a $20 per share bid by GameStop.
(Page 2 of 2)
Tait believes his new approach to running Mercantec will help differentiate Mercantec from its key competitors, which include LaGarde Inc., an Olathe, Kan., e-commerce application and shopping cart development company, and Kurant Corp., a San Francisco-based Internet and web retailing program developer that last month was bought by eBay.
Traditionally Mercantec has developed marketing and reseller or distribution agreements with companies that host storefronts and maintain retailing databases such as Internet service providers, web hosting companies and other telecommunications organizations. Today Mercantec`s biggest value-added sales and distribution agreement is with Verio, a division of NTT Communications and one of world`s biggest providers of Internet Protocol services to more than 5,000 enterprise customers worldwide.
But paramount to Mercantec`s growth is diversifying its sales and marketing base. "These days web retailers want their vendor to deliver all aspects of payments and the handling of transactions," Tait says. "Through new alliances with third-party marketplace sites and others we are trying to diversify distribution and offer an updated suite of applications."
Recently Mercantec entered into a pair of marketing and sales relationships with Lightbridge and e-onlinedata Inc., a Powell, Ohio, merchant account and payment solutions provider in the business-to-consumer e-commerce market since 1996. With Lightbridge, Mercantec`s shopping cart and e-commerce technology is now certified to perform on the company`s Authorize.Net system, an Internet Protocol-based payments processing gateway used by nearly 100,000 web retailers and other online businesses. In addition to being a certified Authorize.Net technology vendor, Lightbridge will also help market Mercantec`s PowerCommerce 2005 and SoftCart5 applications to its large user base.
Mercantec has a similar arrangement with e-onlinedata, which sets up and maintains merchant accounts for web retailers and specializes in processing transactions for eBay merchants and other online auction sellers. "In this market it`s very important not be a one-trick pony," Tait says. "New relationships with companies such as Lightbridge and e-onlinedata complete our applications package and create a product that will be enthusiastically embraced by our merchants and resellers."
Altogether, e-onlinedata maintains more than 18,000 mostly web retailer merchant accounts, including about 1,000 retailers operating on eBay. "It`s a good fit for both companies," says Sloane Bouchever, president of e-onlinedata. "Mercantec gives us access to a large base of their traditional web merchants and we can help them sell to a marketplace such as eBay, which has more than 100,000 eBay Power Sellers who sell at least $1,000 of merchandise per month."
Tait`s goal with a reborn and refocused Mercantec is building up a base of about 1 million users within the next several years. For a small company with just 12 full-time employees that is only now returning to profitability, the goal seems unrealistic to some observers, particularly if it is staking its future against a slew of other technology companies selling to eBay merchants. "Companies coming in now are a little late," Wingo says. "It`s already a hot market with multiple parties looking to capitalize on developing turnkey packages."
The long haul
But Tait says Mercantec can differentiate from the competition because of a decade of developing and pioneering affordable e-commerce packages for smaller retailers. For instance, Mercantec is pricing PowerCommerce at just $25 to $250 per month depending on the features the merchant wants or a range of $250 to $2,500 for retailers who want to purchase their software outright.
Mercantec isn`t ruling out the possibility of being acquired or over time bringing in larger investors, but for now Tait says he`s concentrating on diversifying and building sales--and profits--for the long haul. "Since taking the company back we focused on the technology and upgrading it and now it`s time to concentrate on distribution and diversity," Tait says. "We`ve been in business for more than a decade and expect to be here for a long time to come." l
Mark Brohan is principal of the Milwaukee, Wis.-based Brohan Group, providing consulting and editorial services to publishers.