Salvaging the Dot-coms

One company's distress is another company's business model.
George DonnellyNovember 1, 2000

One company’s distress is another company’s business model. And as dot- com after dot-com loses fuel and starts heading for a nosedive, there’s an Internet company in place to provide parachutes or ultimately sift through the wreckage, if need be.

The company,, is a surplus asset management Web site that has positioned itself to rescue or ultimately help liquidate Internet company assets. In the worst case, says iSolve CEO Lance Lundberg, his company will help dispose of the little remaining in hard assets, such as servers and desk chairs. But Lundberg says iSolve can provide more proactive solutions, such as trying to preserve intellectual assets by taking excess inventory off the hands of business-to- consumer dot-coms in exchange for advertising time procured through its venture backers. For example, “A dot-com that sells lingerie recently misjudged a fashion trend,” he says. “We actually bought it on a barter basis. They took media time for it.” In turn, iSolve moved the merchandise through its site. The company also works to fold back-end operations into other dot-coms that have excess capacity, a move that can cut costs and keep a business afloat.

But Internet barter and salvage is only a part of iSolve’s business. Within the crowded surplus inventory space, the company has distinguished itself by buying up an assortment of surplus goods, including 800,000 pounds of pasta, folding lawn chairs, a variety of cigars, and high-end pens. “If you don’t become a market maker to some degree, you tend to get a bunch of listings at wish- list type of prices, and they just sit there,” says Lundberg. The company has partners in the “extreme value” retail industry that serve as customers and experts in assessing surplus merchandise value so that a dot-com doesn’t overpay for, say, thousands of pounds of plastic bags. “We saw iSolve as an extension of our procurement activities,” says Robert A. Roberts, a director at Liquidation World Inc., an extreme value retailer that operates 86 retail outlets in Canada and the Pacific Northwest. “We have a fairly large buy group, but they can’t be everywhere at all times.” Roberts says iSolve’s Internet potential to move goods often gets the attention of company executives looking to add a few points to the bottom line. Surplus “tends to be an orphaned responsibility in any major company,” he says. “I can’t think of any company that doesn’t have a surplus inventory problem.”

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