Site connects phone buyers, sellers
Atlanta Business Chronicle - by Judith Potwora
WirelessVertical.com is a little like the eBay of used wireless telephone equipment.
WirelessVertical.com is a Web-based broker for business-to-business electronic commerce in wireless equipment. The new Web site launched in May is designed to connect buyers and sellers of excess and discontinued equipment.
WirelessVertical.com markets itself as a service to bring together the buyers, sellers and refurbishers of wireless telephone equipment. For example, wireless telephones, known as "handsets" in the industry, can be remade into prepaid telephones. WirelessVertical.com provides a place for companies that need to unload handsets with companies that need to buy.
"From 1999 to 2001, the number of handsets that are going to pile up in repair departments is going to quadruple," said company co-founder James Caruso, who also is board chairman. "So, this is a problem that somebody is going to deal with and we're here to deal with it."
Caruso founded the company with George Cresto, John Drake and Phil Rocheteau, all three executives from TQM Consulting Inc., a firm which provides Internet solutions. WirelessVertical.com plans to close a $7 million round of venture capital financing within the next 90 days, Caruso said.
Currently, the company has seven employees and plans to grow to more than 50 employees within the next year.
Launched May 1, the Web site attracted 20 customers in its first seven days. "We think it's a very good week," Caruso said.
While some wireless carriers have regional recycling programs for obsolete equipment, WirelessVertical.com offers itself as a tool that crosses geographic regions, Caruso said. For example, WirelessVertical.com can put in place programs for wireless carriers to manage the merchandise that accumulates at their retail outlets nationwide.
"These guys have a pile of handsets in the back of the store that they don't know what to do with, they don't know what it's worth," Caruso said.
Wireless telephones are a good place to start because their alternate use as prepaid telephones is one of the fastest-growing segments of the wireless industry, Caruso said. Prepaid telephones serve the same purpose as prepaid long-distance cards -- they allow freedom from contracts and paperwork.
"What we're really trying to do is find a good home for things that are still valuable," Caruso said. In addition to handsets, that includes other pieces of equipment such as network switches.
"Conceptually, I think he's identified a number of the key factors for potentially being successful at this," said Mike Gill, founder of Maryland-based Americom Wireless, which specializes in handset refurbishment and customer technical support. Americom's entry into the overseas and Latin American markets is through its new parent company, Solectron Corp. (NYSE: SLR), which acquired it last month. Gill noted that wireless carriers are constantly searching for ways to lower their costs, and WirelessVertical's business plan plays right into that.
Cost-cutting is important because many people are shocked at the higher price of new wireless telephones, Gill said. The first wave of wireless telephones was highly subsidized to entice customers to sign on for wireless service. Now, with the need for enticing customers not as strong, customers are sometimes surprised at the price of the newer telephones. Then there are added features, such as Web browsers, that also push up the price.
Gill said one challenge to WirelessVertical is that the cost of the new product must stay high enough to keep the price of the refurbished products attractive.
"The problem is that customers don't always behave the way you expect them to," Gill said. "And carriers don't always behave the way you expect them to."
Judith Potwora is a contributing writer for Atlanta Business Chronicle. Reach her at atlanta@amcity.com.
Latest News |
Most Viewed Stories |
Most Emailed Stories |
