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Pioneer
of E-Commerce
Marybeth
Dee is one of those innovative people with creative minds who had the
foresight to envisage possibilities of using the internet as a communications
tool for trade between Asia and North America.
 
Reaping Rewards of Success
Unloading 30,000 grandfather clocks, 12,341 boxes of Crazy Zoo Chocolates or
601,000 Nicaraguan cigars is no simple task. But inventive companies such as
Rebound International are finding ways to leverage Internet marketplaces to find
buyers for even the hardest-to-sell products.
Rebound, based in Hong Kong and San Francisco, has
created an electronic marketplace that matches buyers and sellers of excess
inventory. While finding buyers for surplus may sound like a small market, all
those excess clothes, computers, jewelry, furniture, food products and other
consumer goods really do add up. It's estimated they generate about $100 billion
worth of revenue worldwide each year.
The excess inventory comes from canceled orders,
production overruns, market obsolescence, bankruptcy, packaging changes and
more, says Marybeth Dee, Rebound's 35-year-old co-founder and president.
"It's such a large industry and yet it's so highly fragmented that nobody
has really heard about it and for a reason," she says.
It's a nasty little fact of doing business that
manufacturers don't like to talk about - almost all of them have goods that end
up in warehouses instead of on a showroom floor. So what's a company to do?
Companies need to get rid of the products, but they
don't want to cannibalize their distribution channels or damage the brand, Dee
says. International distribution for unwanted goods opens new markets and helps
companies get a higher price for goods.
With Rebound (www.rebound.com), a maker of designer
jackets in the U.S. could sell a few thousand leftover pieces into the Chinese
market, without worrying about hurting the price in the U.S. Rebound will also
host private auctions to screen potential buyers.
Like eBay, Rebound hooks up buyers and sellers over
the Internet for a 4 percent to 8 percent cut from whichever party originates
the deal. Its largest brokered deal was with a large distributor in the U.S.
looking to dispose of $1.7 million worth of mixed housewares. Its average order
is $50,000.
Dee teamed up with Jeremy Tang, 32, of Hong Kong, to
launch Rebound in March. Dee previously headed Trade corp Enterprise, a
traditional liquidation company that moved branded consumer goods from North
America to Southeast Asia.
Together they have grown the company with a little
help from their friends. Rebound has struck up relationships with numerous
trading partners, including Chinese External Trade Development Council, Hong
Kong Trade Development Council, Hong Kong Toys Union, Korean International Trade
Association and the Electronics Industry Association of Korea.
In August, Rebound signed agreements to cross-promote
services with EC21.net, an electronic trade gateway backed by the KITA, and used
by approximately 75,000 Korean traders, and the EIAK, which represents 400
member companies. It also formed a partnership with The Ozer Group, which
liquidated $3 billion in excess goods in the past three years.
To make sure the goods get delivered easily, Rebound
has relationships with Danzas and International Freight to offer global
logistics services, and with Wells Fargo and other financial companies for
online payment solutions. It also has an extensive partnership with inspection
and quality insurance company Societe Generale de Surveillance.
Not everyone is welcome
To date, Rebound has more than $145 million worth of
products listed on its site. The private company has more than 2,500 registered
buyers and sellers. Rebound rejects 25 percent of the buyers and sellers that
register at its site because they don't qualify. "We only like dealing with
people who own the product and people who have the checkbook to buy the
product," Dee says.
Bargain Castle International Discount Centers in
Vancouver, British Columbia, is one company that made the cut. The housewares
wholesaler joined Rebound earlier this year to partner with international
clients, says Jason McDougal, Bargain Castle's chief executive. The 30-employee
company (www. bargaincastle.com) has been able to expand further into the Asian
and European markets thanks to Rebound, he says.
Rebound expects to complete its second round of
financing in the next few weeks, Dee says. In its first round, Rebound received
$5 million in funding, including an investment from The Goldman Sachs Group. It
was harder to get capital this time because of the shakeout in the
business-to-business industry, but Dee expects Rebound's financing deal to go
through.
Rebound continues to face competition from other
start-up companies such as Tradeout.com and Retail Exchange.com. But its edge is
that it is a truly global company, Dee says. Tradeout and Retailexchange are
marketplaces that concentrate primarily on disposing of consumer and industrial
excess inventory in the U.S.
Companies are using B2B exchanges to liquidate
inventory, and they are getting more money for their products, says Kevin
Costello, managing partner at Arthur Andersen's digital market practice. But in
the future, the excess inventory worldwide will shrink because of the
efficiencies created in the buying process, he says. And consumer excess
inventory has always been easier to dispose of than industrial machine parts.
Yet if Rebound expects to turn profitable by the third
quarter of next year, as Dee predicts, it's going to have to sell a lot more
grandfather clocks, Nicaraguan cigars and crazy chocolates. -
By Laura Lorek, Inter@ctive Week
September 18, 2000
Goldman Sachs backs Net pair
US investment bank Goldman Sachs has unveiled
investments in two Asian Internet companies, adding to its US$1 billion global
technology portfolio.
Goldman Sachs (Asia) managing director Shirley Lin
yesterday said the group had invested about $200 million in about 25 Asian
technology companies, of which eight or nine were business-to-business Internet
ventures.
The group has invested in 140 technology ventures
worldwide, excluding telecommunications companies.
"Goldman Sachs has been investing in technology
companies for the past 10 years, and in pure Internet companies since about
three years ago," she said.
Ms Lin was speaking after a launch ceremony for
Rebound, an on-line consumer goods inventory exchange operator set up in October
1998.
Goldman Sachs is the largest institutional investor in
the company.
Rebound provides an electronic inventory auction
service that seeks to re-channel excess inventories at lower transaction costs
than traditional trading methods.
Chief executive Jeremy Tang said industry figures
showed up to $93 billion worth of excess consumer products were generated each
year, of which two-thirds were estimated to be in Asia-Pacific and North
America.
"The industry is large and extremely
fragmented," he said, adding existing channels for Asian manufacturers to
dispose of excess inventories were inefficient and limited.
Separately, mainland-based Internet content provider
China E-Net announced completion of its first round of venture capital funding
of $10 million, led by Goldman Sachs (Asia).
Launched in July last year, China E-Net has formed
alliances with China Internet Weekly, Dow Jones and Xinhua to provide
information technology news to its Web-site enet.com.
President Shen Wei said while the company's only
current source of revenue was advertising, it aimed to launch on-line trading of
information technology equipment in about three months.
The site has brought in advertising revenue of about
$130,000 since its launch, mainly from mainland and US vendors of computer
products. - by Eric Ng South
China Morning Post, March 7, 2000
THE MONDAY FACE
Lessons in humility
Dotcom entrepreneur Jeremy Tang counts costs after a
dotbombing raid
A birthday is generally a time for introspection. Just
past his 33rd, Jeremy Tang - who has watched his dotcom turn into a dotbomb -
has plenty to think about.
Mr Tang has begun closing down Rebound International,
an award-winning company that used the Internet to help suppliers and retailers
in Asia and North America move unwanted inventory.
During his career, the Australian-born executive has
ridden several trends: cigar smoking, the China goods craze of the 1997
handover, and the huge run-up of the technology stock market. But Mr Tang says
it was the subsequent tech plunge that taught him a few harsh lessons.
"If there is one thing I have learned . . . in
the last 18 months, it is just humility," he said.
"All these young Net entrepreneurs, people like
myself, have been very lucky in a morbid sort of a way to have experienced such
a heavy boom-bust cycle in such a compressed period of time. Because as long as
we learn from that, or as long as I learn from that, it is an incredibly
valuable piece of business experience."
Mr Tang co-founded Rebound with Marybeth Dee,
revamping her small liquidator called Tradepac. They estimated the global market
for consumer goods that companies could not sell on home turf for branding,
relationship or late shipping reasons was about US$100 billion a year.
But few firms handled such inventory in Asia.
The business partners secured US$650,000 seed money -
US$50,000 from Mr Tang's pocket - and a US$3 million round of funding from
brokerage Goldman Sachs and Chengwai Ventures in late 1999. In March last year,
they launched a Web site equipped for online auctions.
Rebound, so named because it would bring excess Palm
Pilots or rejected frozen teriyaki chicken wings back from the graveyard of
unwanted goods, had a bright future due to the tech frenzy. The company grew to
about 80 employees with 14 offices worldwide, including joint headquarters in
Hong Kong and San Francisco.
It was burning through US$500,000 a month.
Despite the need for a second round of funding, things
looked good on November 9 last year, when Rebound won the IgniteAsia
business-plan competition for companies worth more than US$1 million. About 240
plans from firms around Asia had been submitted. Venture capitalists, judges and
an audience voted Rebound the heavyweight winner. The award brought a blaze of
media attention, both at home and abroad.
Money negotiations, with a group of investors headed
by Crystal Internet Venture Funds, looked like they were leading to a US$12
million injection until December 29, when they fell apart.
No more professional investors were willing to step up
to the plate.
Rebound executives clung to the hope that Best3C, a
business-to-business firm based in Taiwan and the United States that moves
communications gear, electronics and computers, would provide a buyout offer.
They worked for months to cut a deal, with the help of Goldman Sachs which had
invested in both firms. Mr Tang had not been paid his salary in months. Rebound
turned off its Web site while talks dragged. In mid-April, a deal between
Rebound and Best3C fell through.
Despite the unhappy ending, and a professional future
that is up in the air, Mr Tang said he had learned a lot.
"Rebound went through the cycle and we tried to
do everything bigger, better, faster and were sort of caught up in the momentum
of that craze," Mr Tang said.
"The people that sat back on the sidelines and
took a more traditional, conservative approach to the whole Internet craze are
the ones that will probably end up coming out ahead. It is like the hare and the
tortoise," he said.
"To come in, guns blazing, is not going to win in
Asia."
Now, Mr Tang does not know if he will stay in his
adopted home. Born in 1968 to a Chinese father and Australian mother, Mr Tang
was the oldest of three. After his parents split up, his mother remarried and
his stepfather brought the family to Hong Kong in 1982.
His stepfather worked with the Government on
environmental issues while his mother became a primary school teacher. After
finishing high school, he took a year off to work and travel through Europe and
North America. The interest in finance came while he was working for
markets-related firms. Mr Tang was excited by the drama in his offices -
"screaming and shouting" - and he saw the stock market crash in 1987.
- South China Morning Post
Monday, April 23, 2001
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