Micro Merchants Trade Smoothly Online

(The Economic Times) - August 7, 2003 - While niche players in the software services space are so focused that they have found buyers for their products in markets which many of their peers do not even dream of targeting.

The Indian-promoted, US-based Andale is a case in point. This startup specifically targets online sellers of commodities in the virtual world. Andale sells several of its software products to millions of small traders who transact on popular auction sites in the Internet like eBay, Yahoo and Amazon.

Its auction management tools and services are used by a large army of on-line sellers. Munjal Shah, Andale's chief executive and co-founder claims to have over 60,000 traders (who he refers to as micro merchants) as customers. Such is the utility value of its tools that over 2000 new micro merchants are signing up every week. "Small business like to keep track of what sells, and we provide them tools for it," says Shah.

To lure the mirco merchants, Andale gives Counters, its most utilized value added tool for free. Counters help auction sellers to assess traffic on the auction site.

Andale's revenues are volume driven. It offers a whole range of pricing models to micro merchants -the price varies from 20 cents for listing to $5.95 for items sold and $2.95 a month for providing research service on what customers are buying on specific auction site and the number of items being sold. Shah, however, is not willing to reveal Andale's revenue.

Shah says that the size of micro traders is growing with auction sites like eBay proving to be very cost effective. According to him the NASDAQ listed eBay is so popular among the micro merchants community that 16 million items over 27,000 categories are on an average traded in its site every day.

The business model of Andale has obviously attracted venture capitalists, as the company has raised $61 million from blue chip venture capital firms like Tarrant Venture and Accel Partners.

As its target customers are netizens, Andale does not have expensive sales personnel calling on customers. It is leveraging this by conducting outbound sales from India. Through it's alliance with eBay, it gets the email and contact details of online sellers.

R Subramanyam

app.vendio.com