Worry-Free E-Commerce

CrossCommerce.com's E-Merchandising Platform competes directly with similar offerings from several companies and with affiliate marketing programs at major Web sites.

Epod Corp., Escalate Inc., Iconomy.com Inc., iVendor Inc., Vitessa Corp. and YellowBrix Inc. all sell outsourced services designed to take the worry out of adding e-commerce to Web sites.

CrossCommerce names Redwood Shores, Calif.-based Escalate as its major competitor. "They're pretty similar," says analyst David Cooperstein at Forrester Research. "Escalate seems to be more of a soup-to-nuts vendor."

CrossCommerce co-founder and President Peter Nordberg characterizes Escalate as pushing more of a storefront solution. Escalate's senior marketing director, Erik Frieberg, says CrossCommerce provides a less-comprehensive solution than Escalate and focuses on the lowest-margin part of the market.

As a result, says Frieberg, CrossCommerce, iVendor and the like must charge a markup for low-priced products such as CDs. They rank low in search results from shopping programs that are designed to find the lowest prices. "They're assuming that the customers aren't going to shop around," he says.

In contrast, Escalate targets vendors that can maintain healthy margins on higher-ticket items by entering into exclusive e-commerce arrangements, such as clothing company The North Face Inc. in San Leandro, Calif., and San Francisco-based Quokka Sports Inc.

Examining Alternatives

Seattle-based Vitessa purports to have a cleaner, simpler product that allows "buy" buttons to be placed on any HTML document. "We don't have a separate database that needs to be changed," says spokesman Martin Levy. "All we do is process the business rules." The company started with e-commerce infrastructure and later added merchandising and supplier relationships.

CrossCommerce competes indirectly with alternative revenue sources, especially affiliate marketing programs, in which popular e-commerce sites like Seattle-based Amazon.com Inc. sell links to vendors with complementary products. While CrossCommerce says only 2% of customers make purchases from such links, Cooperstein says they're proving to be popular. "Affiliate marketing has been very successful," he says, adding that it accounted for 13% of site revenue last year. - David Essex

Copyright © 2000 IDG Communications, Inc.

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