Internet watch 3-01March 2001
The Real Deal
OnlineAssetExchange.com seeks to bring pricing transparency to the business of used equipment.
Looking for a used six-color Komori? Need additional bindery gear to fulfill a contract? Then logging onto OnlineAssetExchange.com may be a way to quickly solve an equipment crisis.
Launched in March of 2000, OnlineAssetExchange.com began as an online exchange and auction site dedicated to selling industrial equipment. In just under a year, it has become the largest seller of secondary assets in the used industrial equipment space with 200,000 line items, which is comprised of about $14billion in assets, according to the site's co-founder Norm Bastin.
With its success in the industrial equipment space, OnlineAssetExchange.com is now expanding into 14 other vertical markets, including the printing industry.
Bastin recently shared with Printing Impressions OnlineAssetExchange's mission, how the Website sees its role within the industry and the value proposition it believes it can bring to the table.
PI: What value does OnlineAsset-Exchange believe it can bring to the printing industry?
Bastin: In the past, there has never been a viable market to move assets that have come off-line. So what happens is that you have thousands of brokers and used equipment dealers that buy a company's assets at 20 cents on the dollar, and then sell it at 80 cents on the dollar.
The result: They are adding no value to the transaction other than their fee. They make their money by not having pricing transparency.
If you are looking for a used, six-color Komori, then you may call your local dealer. He may have one or two presses available. He'll set the pricing for you, but you don't have any place to look up and see 40 such Komori presses along with their pricing. We enable you to do just that.
PI: So, in essence, are you removing the broker from the equation?
Bastin: We are providing end-to-end services for everything second tier and lower printers might need.
What makes this unique is that, in the past, a dealer or broker made all the money. They are the hidden millionaires. There are more millionaires per capita in the used equipment business than there are on Wall Street. We're putting the money back into the seller's pocket, not the broker's pocket.
We're also providing printers the ability to find the printing equipment that they need, when they need it. I have a friend who owns a large printing company in San Diego. A few years ago, he was trying to find a UV flexo machine so he could fulfill a major contract.
He couldn't wait 18 months for the press to be manufactured, when he had a contract today. All he could do was get on the phone and call around to see who might have such a press.
We are providing a service where he can type in "UV flexo" into the computer and not only be able to find one, but maybe be able to find two or three so that he has some selection.
Our intention is to have a mass offering of quality assets from major corporations, such as the R.R. Donnelley's of the world, while being able to provide these assets at fair prices to our customers.
PI: You've mentioned that you provide end-to-end service. What exactly are some of those services?
Bastin: We provide the printing industry the ability to finance the equipment, lease it, as well as sell the equipment and get a higher price for that machinery. We also provide help with shipping, as well as a 90-day warranty on anything purchased through us. We want to instill confidence in people purchasing from the site.
In addition to the exchange, we also provide a Webcast auction once a month. We can also do a brick-and-mortar auction within a region.
PI: What kind of value do you bring to the seller?
Bastin: We offer a service to larger companies that help them with their asset remarketing. We have a piece of software called Asset Tracker that manages fully depreciated assets or off-line assets. When it's coming off-line, it immediately goes onto our site. We help them manage that asset and help them get those dollars instead of just stacking those assets off to the side.
PI: You've said that OnlineAssetExchange.com sees the printing and graphic arts market as being key to its success. Can you explain why it's such an important market?
Bastin: Printing presses have a long life. For example, while Donnelley wants to have the most efficient press, other printers may not need such highly efficient equipment. Frequently, you have a web press that comes off-line at Donnelley.
That press is then bought by George Rice in Los Angeles. George Rice might eventually sell it to Frye and Smith in Orange County, and Frye and Smith might sell it to someone in San Diego. Then, from San Diego, it goes down into Mexico and possibly into India. So there are multiple sales possibilities for one press.
PI: By streamlining this process, are you hurting manufacturers?
Bastin: A lot of the equipment we sell often moves offshore to countries where people are trying to increase their GDP. We have customers all over world that, until now, never had the opportunity to do this.
It also helps the manufacturers because we're moving this equipment offshore, so we are not hurting their sales in the United States.
PI: What can we expect from Online- AssetExchange in the future?
Bastin: We want to provide a daily destination site for printers. We plan to offer the supplies needed to run the press, as well as a place to bid on jobs. Not only will we provide end-to-end service, but also all the ancillary services that a printer needs.
PI: Why will you be one of the few dotcoms to survive the shakeout?
Bastin: Many of dotcoms were run by 20-years-olds who didn't have a real business model. Others were in industries where there was an 800-pound gorilla that could enter the market and really undercut them.
Take a look at the chemical industry. A huge chemical company can come into the market, create its own consortium and do it better than the dotcom. We don't have an 800-pound gorilla in this space.
There really is no national or regional player in this area. It's a truly fragmented marketplace, and there are no key players. We can provide the fluidness that you cannot find anywhere else.