M-xchange blames business model for failure.America's largest corporations will spend $50 billion this year with minority-owned companies. Should matchmakers Matchmakers are an elongate confectionery product made by Nestlé. Thin, twig-like and brittle, they were first launched in 1968 by Rowntree's and were just one third of the length they are now. For many years they were available in either mint, coffee or orange flavour. linking big buyers and small suppliers expect sure-fire profits? Only if they have the right business model.
July brought the shutdown shut·down
A cessation of operations or activity, as at a factory.
the closing of a factory, shop, or other business
shut down of a promising four-month-old start-up, M-xchange.com Inc. the online trade exchange company facilitating minority supplier relationships for Fortune 500 companies. Because retired General Motors vice president, Roy Roberts
Roy Roberts (March 19, 1900 - May 28, 1975) was an American character actor. , 61, was cofounder co·found
tr.v. co·found·ed, co·found·ing, co·founds
To establish or found in concert with another or others.
co·found , M-xchange made news. (See "Roberts Shifts From GM to Dotcom," June 2000).
The closure notice on M-xchange's Website gave this explanation, later deleted Deleted
A security that is no longer included on a specified market. Sometimes referred to as "delisted".
Reasons for delisting include violating regulations, failing to meet financial specifications set out by the stock exchange and going bankrupt. : "The ability to charge transaction fees for Web-based commercial exchanges has declined, rendering it difficult for M-xchange to achieve profitability in an adequate time frame using its business model. Additionally, the willingness of the capital markets to finance business-to-business [firms] has also declined dramatically."
As a middleman mid·dle·man
1. A trader who buys from producers and sells to retailers or consumers.
2. An intermediary; a go-between. , M-xchange collected a 1% to 2.5% finders fee from buyers who used the site to close a deal.
Given e-commerce, the real snag for suppliers is the ability to perform contracts. "As corporate America decreases its supplier base, minority businesses need to make sure they can indeed, service those larger corporations," says Adele Johnson, president, Virginia Regional Minority Supplier Development Council. "How to build capacity? Strategic Partnerships," says Johnson.