Online industrial auction specialist DoveBid said Tuesday it has acquired the capital asset disposition firm TradeOut as part of an aggressive effort to expand DoveBid’s business-to-business (B2B) offerings. The TradeOut purchase is DoveBid’s 15th acquisition in the past two years.
“Clearly, there are a lot of B2B e-commerce business models that never materialized, with the exception of DoveBid,” Yankee Group vice president of strategy and technology Harry Tse told the E-Commerce Times. “With the industry experience of DoveBid, they are definitely capable of absorbing this acquisition and expanding the business.”
TradeOut, which specializes in commercial transportation assets, is a preferred asset remarketing distribution partner for several businesses of GE Capital, a subsidiary of General Electric (NYSE: GE). GE Capital announced the nomination of Jim Robo, chief executive officer of GE transportation services provider Transport International Pool (TIP), to join DoveBid’s board of directors.
Expanded B2B Services
DoveBid, which was founded in 1937 and opened its online auction site last year, now offers brick-and-click B2B industrial auction and appraisal services in 20 different asset categories. The TradeOut acquisition launches a new DoveBid asset category in commercial transportation.
DoveBid appraises and sells used capital assets via live Webcast auctions, around-the-clock online auctions, sealed bid Internet sales, and private treaty Internet sales, as well as on location. The company has 20 offices throughout North America, Europe, and the Asia-Pacific region.
First-quarter 2001 net revenues for DoveBid reached US$27.6 million — a 500 percent increase over the first quarter of 2000.
Feasting on Leftovers
“In this case, having the online auction has definitely enhanced their whole business model,” Tse said. “Oftentimes the buyer is from a developing country, and having the Internet helps them attract and round up potential buyers.”
DoveBid has also been the home of liquidation sales for many dot-com casualties, including AllAdvantage.com, Homegrocer.com, and Petstore.com. According to DoveBid, dot-coms represent about 10 percent of its auction business.
Not Another eBay
Tse said that the TradeOut purchase gives DoveBid an increased share in capital technology assets.
“TradeOut was in the same space but it had a different business model,” Tse said. “It was more concentrated on the technology side rather than on actual services.”
Tse said he expects DoveBid to continue its aggressive acquisition campaign, but added that, unlike in the consumer auction world, simply getting bigger isn’t really the key to continued success.
“Whatever acquisition they make is more on the complementary side to take them to a market they aren’t in,” said Tse. “It’s not like eBay where you can scale it. There’s still some limitation to the scalability — which is people/human resources — so they have to go slowly and make sure there’s no overlap (in asset category).”