Did Somebody Say Revenue Increase?

intesource Q3 revenues jump 262 percent

PHOENIX, AZ  November 16, 2001  intesource, which provides Web-based procurement services to grocery and healthcare buyers, announced today that third-quarter revenues increased 262 percent over the previous 12 months. Purchasing volume in grocery alone was up 386 percent over the prior 12 months. The momentum is driven by more than 1,200 registered suppliers and 200-plus buyers who have negotiated more than $250 million in grocery retail products alone.

A significant pipeline of prospective customers is currently realizing immediate, hard-dollar ROI and generating revenue for intesource through a hands-on pilot program. Both the grocery and healthcare industries' buying strategies are unique to their vertical and unique to other companies within the verticals, requiring firsthand proof of concept for every new customer.

intesource developed a pilot program wherein prospective customers negotiate category purchases with regular suppliers and realize labor and product cost savings immediately. Five companies are currently in intesource's pilot program.

"Pilot negotiations close deals for us. For instance, one healthcare customer saved $800,000 in 20 minutes," said Oren Davis, intesource CEO and founder. "The pilot negotiations show companies that intesource enhances  instead of changing -- proven practices to dramatically reduce labor costs and negotiate better product costs."

To date, more than 90 percent of companies that have participated in an intesource pilot program have signed on as customers at the end of the pilot period, Davis said.

Bashas, intesource's first customer, marks its second year of online procurement negotiations this month. Category manager Tom Buttes, who buys commodity meat for the $1 billion Arizona grocery chain, now negotiates 70 percent of meat purchases online using intesource's service. He said he has decreased labor costs by 60 percent.