Startup Wants To Reshape Net Auction Sales
Tom Stein, Chronicle Staff Writer
Monday, October 4, 1999

Andale Inc. of Santa Clara wants to transform anyone who ever sold a Beanie Baby on eBay into an online auction power seller. The company will announce tomorrow that it has secured $19.6 million in venture funding to do just that.

Andale, founded in February of this year, is backed by Accel Partners, Mohr Davidow Ventures, Oak Hill Venture Partners and angel investors.

"We invested in Andale because it has the potential to do for auction sellers what Intuit software did for small business owners," said George Zachary, a partner at Mohr Davidow.

While auctions sites like eBay were originally intended as consumer-to-consumer marketplaces, Andale chief executive Munjal Shah said they have in fact become avenues for home-based business owners and savvy entrepreneurs to reach more customers. He added that these power sellers are in dire need of software and services to manage all their transactions.

Andale offers what it calls a "Web-based auction business management" service. Shah claims that roughly 80 percent of all transactions on eBay are conducted by just 4 percent of the site's 5.7 million members. EBay would not confirm these numbers.

Here's how Andale works: Instead of going to many different sites, members can post their product listings and graphics on the Andale site, which in turn will submit those ads to multiple auction sites, such as eBay, Amazon.com, BizBuyer.com, and Respond.com.

The Andale site also will automatically calculate tax and shipping costs, generate invoices, provide credit card services, do basic bookkeeping and help sellers locate new product supplies.

In exchange for the service, which will test-launch on Tuesday, users must pay Andale either an up- front fee or a yet-to-be-determined percentage of all sales.

Andale faces several hurdles. First, it must go head-to-head with existing services like Auction Watch, which also provides listing and image hosting features, but doesn't have the accounting features of Andale's offering. Lots of vendors are eager to help small businesses get on the Web, both through auctions and online storefronts. Last week, Amazon.com rolled out its zShops initiative, which allows entrepreneurs to set up virtual stores on the Amazon site. Microsoft and Yahoo offer similar services.

EBay has not always encouraged other companies who try to hitch their star to its site. Last week the Internet auction powerhouse said it would do everything in its power to prevent anyone from gathering and reusing information about eBay auctions. The move was clearly targeted at auction comparison shopping services.

But it appears that eBay doesn't have a problem with Andale. EBay spokesman Kevin Pursglove said his company has not had the chance to evaluate the Andale service. "(From) what we know of Andale, it seems interesting and could be one more tool available to eBay users," he said. "We wish them success." Some eBay power sellers are excited about Andale's potential. Anne Estes is a San Francisco businesswoman who plans to use Andale to sell belts on eBay and other auction sites.

"First and foremost, I see Andale as a major timesaver," said Estes. "Right now, I spend an hour just trying to manage a single listing. It's the time factor that has really held me back from making a lot more money on the Web."

©1999 San Francisco Chronicle