Surplus Goods Exchange for CPG

WorldWide Retail Exchange launches excess goods channel for retailers and suppliers

San Diego -- February 7, 2002 -- The WorldWide Retail Exchange (WWRE), a B2B exchange for retailers and suppliers, has joined with solution provider Visagent Corp. to launch an e-marketplace for trading surplus, excess and closeout consumer packaged goods (CPG).

The Surplus Goods Exchange (SGE) is designed to help sellers achieve savings on redistribution costs and to allow buyers to save on procurement costs for surplus goods, according to the WWRE.

The SGE is an electronic bulletin board that brings suppliers and retailers together by identifying common product matches, facilitating terms and contract negotiation and providing the support services necessary to complete transactions. The SGE offers an online trading process that integrates freight logistics, financial settlement and dispute resolution.

"This Web-based approach is an easy-to-access, organized and efficient means of dealing with surplus merchandise," said Alan Markert, vice president of e-commerce and data integrity for San Antonio, Texas-based grocer H-E-B. "It is much easier and faster to execute a transaction through this Web-based service than through non-Web based alternatives. The management of the transaction through Visagent also helps ensure the transaction will be completed as expected by both the seller and buyer."

Retail exchange members H-E-B, Safeway Winn-Dixie and others, along with the WWRE, Visagent and several CPG suppliers, worked together in developing the SGE to address their common goal of reducing surplus goods in the retail supply chain.

"Safeway realized an opportunity to work with our trading partners to streamline a very inefficient process, and as a result, got involved early in the development of the SGE," said Howard Befort, corporate vice president of marketing operations for Safeway.

Peter Jueptner, chief commercial officer for the WWRE, said that ineffective promotions, forecast errors and seasonal variances perpetuate imbalances throughout the retail supply chain. "However, current secondary market trading channels have limitations and involve expensive intermediaries," Jueptner added.

The exchange elected to address this problem by incorporating Visagent's industry operating systems (I-OPS) as the basis for the SGE's platform to facilitate surplus goods trading without jeopardizing retailer-supplier relationships.

Mark Rubin, CEO of Jacksonville, Fla.-based Visagent Corp., said the SGE would provide retailers and suppliers with an efficient, cost-effective and equitable channel for moving excess goods.

The SGE can be used off the shelf or integrated directly into back office processes, such as procurement and logistics, where goods are identified for sale or purchase by users' criteria.

Sellers post surplus goods or excess goods to the SGE by UPC code and quantity, then choose from a list of potential buying audiences, such as internal divisions, other retailers, dollar stores or exporters.

Buyers choose goods for purchase that are presented complete with all costs, including transport to their loading docks, via service integration with Landstar Logistics, one of the largest logistics services providers in the United States.

There is no fee to sell goods on the SGE, and when buying goods, a transaction fee is built in that the exchange says represents a 70 to 90 percent reduction in fees compared to traditional disposal channels.

Launch of the new e-marketplace bucks the trend in the market, which has seen numerous online markets close down due to lack of interest among buyers and sellers unwilling to adopt new processes and pay a transaction fee to supplant existing buyer-supplier relationships. Analysts have speculated, however, that well-niched e-marketplaces could survive the industry shakeout by targeting specific needs for particular vertical sectors.

The SGE has been under development since the first quarter of 2001. A formal SGE pilot program is now underway, focusing on grocery; health, beauty and cosmetics; and general merchandise, with the official launch for all WWRE members, non-member retailers and suppliers and leading discount/dollar store chains set for this month.

The WWRE and Visagent will begin preparing for the SGE rollout to European retailers and suppliers in the second quarter of this year.

Visagent will continue to manage and coordinate all of the SGE's day-to-day operations, training, transportation arrangements and future exchange enhancements.