Industryweek 2286 19240mitchfree

Online Marketplaces Offer Global Opportunities

May 27, 2009
Buyers and suppliers alike find online marketplaces offer a world of advantages.

When Joe Mattes and his business partner started TR Manufacturing in 2004, they entered an Indiana market saturated with machine shops. The partners could not afford a full-time salesperson but they needed to develop a customer base for their close-tolerance machining services. They decided that the internet offered a low-cost way to market their company.

A Web search led them to an online marketplace, While there were other services available, says Mattes, they were targeted at larger volume shops, rather than the small-lot precision machining TR Manufacturing specializes in. By signing up as a supplier on the site, TR Manufacturing was able to access RFQs from thousands of companies. Today, the firm does business in industries such as aerospace, which has no presence in Indiana, and for companies on both coasts. "We can offer our shop rate at a lower wage than some of these other places based strictly on where we are," says Mattes. "One of our customers found they couldn't do work in their captive machine shop for what we can charge, so they pretty much closed it down."

Mattes says using an online marketplace provided not only more reach, but a more efficient selling process. "With, you know these people need your service, they need parts made," he explains. "Whatever service you are offering , they match up and the amount of time you save is huge."

For an annual fee, suppliers of both made-to-order and standard parts are listed on the site. Suppliers set up RFQ filters that match their expertise and capacity, and a multimedia profile that tells prospective customers about them. As RFQs come through the site, which match their capabilities, they can respond to these potential buyers. The service is free to buyers.

"You could search Google for someone that does metal stamping or machining, but you're not going to learn much," says founder and CEO Mitch Free. "You'll see a Web page but you won't learn if they're in the market and have the capacity for what you need now. We offer a very intelligent match which results in the natural market efficiency of two parties that need each other at the right moment in time. The result is naturally lower pricing."

Mitch Free: will launch a global Web site this month.

When Turbo Trac USA's purchasing manager left, James Turner, vice president of business development, was suddenly thrown into his shoes as the developer of a highly efficient mechanical transmission system was preparing an important prototype. Turner looked for help online, and after researching various blogs and discussion groups, he decided to try While he had been unhappy with the vague responses to his RFQs he had received through traditional sourcing channels, he says he received multiple quotes from suppliers, and he was "very pleased" with the bids. "Overall, lead times are shorter and pricing is extremely competitive," says Turner, who says the custom gear ended up costing at least half what he had been prepared to pay.'s Free said he had braced last November for a rough year, reducing the company's workforce by 12% and ending some research and development projects. But he said the manufacturing slide has actually helped business as manufacturers have scrambled to find new customers, and buyers try new methods to reduce costs.

This month, plans to launch a revamped Web site designed for the global market. Free said the company currently has multiple marketplaces running that "don't talk to each other." The new consolidated site will operate in nine languages and allow other companies to build plug-in applications for the site. "We're the best at operating a marketplace, but there are people who are better than us at building tools for specific jobs, such as contract management or analytics. We're building an ecosystem of those partners," he says.

Free is not alone in positioning his company for global success. In February, Jack Ma, the founder of the Alibaba Group, one of the world's biggest business-to-business e-commerce companies, and his management team met with companies such as Yahoo and to explore opportunities for expansion in the United States. In May the company reported that it had reached 481,575 paying members for its international and China marketplaces. Net income for the company fell nearly 16% in the first quarter as it lowered fees in an effort to increase market share.

See Also

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

How Organizations Connect and Engage with Frontline Workers

June 14, 2023
Nearly 80% of the 2.7 billion workers across manufacturing, construction, healthcare, transportation, agriculture, hospitality, and education are frontline. Learn best practices...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!