Andale makes strong financial statement
By Tom Kessenich
April 4, 2002

The goal was reached sooner than Munjal Shah anticipated, much to his delight. And he believes this will be the impetus to help Andale become an even stronger and more viable presence in the online auction industry.

Andale announced on Thursday it reached cash flow breakeven in February and expects to reach cash flow breakeven for March as well. The company originally anticipated reaching this point in August.

"We came in quite a bit early and we're excited about that," Shah, Andale's CEO, told SuperSeller. "We had to make a lot of hard decisions to get there. There were sacrifices we had to make, but the rewards are now starting to come in.

"We got here because of a large investment in our product. Sometimes, there were some bumps in the road, like our Freedom release. But we've been on a continuous improvement and as we look forward, there are some big investments we're going to make."

Despite its rocky debut, Freedom, the company's new auction management software, played pivotal role in Andale's financial gains, Shah said.

"Freedom is a great example of what became a bad launch, good product," he said. "Sometimes in technology you have the opposite, a good launch and a bad product. We ended up having the opposite because it ended up being a great product.

"Our revenues grew over 300 percent from last year and are already in seven digits. A large part of that is due to Freedom."

Shah believes Andale's current financial status will provide users with more comfort in what is currently an unsteady online climate.

"I think this is a very important milestone," he said. "There's a fear in the auction community where people say, 'You have all of our data, but how long are you going to be around?' This is very good for the users because it shows them they can rely on the services for a long time to come.

"Because so many users have chosen us and because we're profitable, we can pour those profits back into our product development. We can continue to launch more services and features and users can get even more for their money."

In addition to the financial news, Andale also said it has become a member of eBay's Preferred Solutions Provider (PSP) and its Developers Program. This is the latest in a series of strategic agreements between the two companies which Shah believes will enhance sellers' ability to more effectively promote and distribute their merchandise on eBay.

As for the immediate future, Shah said online auction users can expect to see more products and product innovations from Andale. One key area Shah wants to address is market intelligence, helping sellers determine such things as the proper price to sell an item at and the average price specific items are selling for online.

Driving those innovations forward will be a commitment to keeping prices reasonable and potentially reduced from what users are currently paying.

"What we'll try to do is lower prices on the products we're offering," Shah said. "That may not happen anytime soon, but I would say that our goal is going to be able to deliver more and more stuff at lower and lower prices every year. That's going to be our goal.

"That's the benefit of being the first to break even."