LBM Daily Exclusive #2

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LBM Daily Lumber + Building Materials Daily

A Lot Of Buzz Surrounding Talpx Closure... In the wake of last week's Talpx announcement and the subsequent coverage of it in last week's and yesterday's LBM Daily Buzz column, a flurry of letter's have come in from readers of the LBM Daily expressing their viewpoints. Thus, both today's Daily Buzz and Industry Insight columns highlight two of these letters.

TraderDirect Is The Best One Left Standing Says LBM Daily Reader... Of the remaining companies still in the game I think TraderDirect is the one that offers the best return to the customer. Their system is a very flexible e-mail program that gives a seller the opportunity to "broadcast" his offers to a larger audience much faster and quicker than picking up the phone. The final transaction may still require a phone call but the process eliminates a lot of "cold calling" and saves the seller a lot of time (and money).

E-commerce in its full implementation was too big a step for many people to take at one time. TraderDirect is a more logical step that uses e-mail, fax and the internet to communicate offers and bids. Once people get in the habit of using their keyboard instead of their telephone first thing every morning than the transition to a full blown e-commerce system becomes easier.

Also the cost associated with the initial integration of most e-commerce systems was prohibitive and the perceived return very small (or non existent) which ultimately hurt most of the pioneering e-commerce companies. On the other hand an e-mail based system like TraderDirect is very inexpensive and user friendly and can be up and running in no time at all.

Bob Maurer - Swanson Group

The Tortoises Of The Wood Products E-commerce World Will Be The Survivors... I was surprised to learn that Talpx had shut down its services. I was under the impression that Talpx was one of the few companies that would make it. After hearing of the shutdown, I wondered what the industry thought about this shutdown. Perhaps some are pleased that Talpx is gone so they do not have to worry about how the technology will affect their company. Others are probably convinced the Internet and e-commerce have nothing to offer to their company. As president and co-founder of WoodPlanet I decided it was worth writing about my perspective as an e-commerce company and suggest that the Internet does and will continue to have something to offer the wood industry.

The companies that have all failed fall into one of two categories. The first to go were the 'dot bombs'. These were started by opportunists, not entrepreneurs and were characterized by companies that had little knowledge of the industry but had dreams of making many millions of dollars. These companies flamed out as soon as the venture capital money dried up and gave a bad name to all Internet-related companies.

The second category of failures are companies that got ahead of themselves, trying to offer solutions faster than the services could be absorbed into the industry. The ideas may have been good, but after spending countless millions of dollars, the market was still not ready to adopt them fast enough. Talpx was probably one of this second group. They had a decent service but could not support the many millions of dollars that had been invested to make the service work and were probably never able to reach cash flow break even.

So who is left? The tortoises. These are the survivors. Companies that are neither trying to get rich quick nor trying to build faster than the industry will absorb them. These companies are developing services that are being used by the industry and everyday make incremental improvements to their services. These are builders and entrepreneurs and pay little attention to all the confusion that is surrounding their work and instead focus on the value to the end-user. Most importantly, these companies are ruthlessly tight when it comes to spending money and recognize that their only major competitor is their accounts payable and the management of cash flow. is one of these companies. World Wide Wood Network and TraderDirect appear to be cut from the same cloth as well. Forest Express is probably not like these companies but may have enough resources to survive despite itself, especially if it can inexpensively scoop up the remains of Talpx.

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Article Contributed By:
Klaas Armster
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