WWRE LAUNCHES A SURPLUS EXCHANGE

PETER PERROTTA

ALEXANDRIA, Va. -- Officials from the WorldWide Retail Exchange here said it is launching a Web-based Surplus Goods Exchange this month that will enable retailers to sell excess inventory to other retailers.

Steve Carr, director of strategic alliances, WWRE, said WWRE is the first of the three major electronic exchanges serving the food industry to offer such a service.

The two other exchanges are Transora, Chicago, and GlobalNetXchange, San Francisco.

The launch of the SGE follows an eight-month development and pilot stage completed with the assistance of the H.E. Butt Grocery Co., San Antonio, and Winn-Dixie, Jacksonville, Fla. Both are WWRE members.

Alan Markert, vice president of e-commerce and data integrity, H-E-B, said after participating in the initial development and pilot process, H-E-B was pleased with the results.

"H-E-B, as a WWRE member, participated with other members in the evaluation and development of the SGE," Markert said.

"This Web-based approach is an easy, organized and efficient means to dealing with surplus merchandise," Markert said. "We plan to use the service.

"Primarily, it is a low-cost and efficient means of selling surplus merchandise," Markert added.

Markert said H-E-B officials found that the Web-based feature offered by the SGE made it a much easier and faster way of transacting the business of selling surplus goods.

Winn-Dixie officials were unavailable for comment.

Carr said the timing of the rollout is key since a number of retailers are currently struggling with holding excess inventory because of the economic climate.

"This service plays into what is on the forefront of [retailers'] minds," Carr said.

"Until collaborative planning, forecasting and replenishment perfects itself, what to do with legitimate surplus goods will remain an issue," Carr said.

Under the program being rolled out by WWRE, the retailer will be obligated to offer the surplus goods it wants to sell back to the supplier.

If the supplier doesn't want the goods, the retailer will then be able to sell the goods on the SGE, Carr said.

Sellers do not pay a fee to use the SGE. WWRE members who purchase goods will pay the exchange a 2.5% transaction fee, and non-members will pay 3.5%, Carr said.

WWRE officials are launching the SGE in conjunction with Visagent, Jacksonville, Fla.

Mark Rubin, chief executive officer, Visagent, said the SGE will also be working in conjunction with a transportation logistics company, Landstar, also in Jacksonville.

Landstar will be coordinating carrier arrangements, billing and financial settlements for purchased and sold goods, Rubin said.

It will also be responsible for negotiating any disputed settlements, Rubin added.

Rubin explained that the prices quoted on the exchange for goods will include the "landed" fees, meaning it includes delivery to the door of the distribution center.

"The management of the transaction through a third-party service provider helps ensure the transaction will be completed as expected by both the seller and buyer," Markert said.

Landstar makes the operation seamless, Rubin said, by providing such services as doing background and credit checks on buyers and sellers.

Carr said during the pilot and development phase of the SGE, sellers of goods in some instances realized savings of up to 80%.

Moreover, Carr said, savings realized by buyers ranged from 5% to 30%.

Additionally, Carr said that plans are under way to expand the SGE into the European and Asian markets.

WWRE officials said development plans for a European version of the SGE will be completed by the end of the first quarter with an anticipated rollout in the second quarter.