E-JACK BE NIMBLE: E-Commerce Companies Turn to Corporate America, Credit Cards
By ANDREW SIMONS
The big dreams of the e-commerce era may be dead in the water, but the companies that once gave life to them haven’t drowned yet.
E-commerce services companies,providers of software and services for various Internet functions,have managed to fashion life preservers out of revamped business models that target brick-and-mortar retailers and big corporations.
“We never even really considered ourselves an e-commerce company,” said Michael Dewey, chief executive of Irvine-based eBuilt Inc., a developer of software used to run applications over networks.
“We first started out with dot-com customers mostly out of necessity,” Dewey said. “I don’t think we have a single dot-com client anymore. If the interface of the network happens to be a Web browser, then we might be working on an e-commerce project. But most of our projects are with large Fortune 500 companies.”
Established businesses have replaced dot-coms as customers at many OC e-commerce companies. Irvine-based Accesspoint Corp. has been inching closer to profitability, thanks to a new transaction-processing operation that opened this year. The company reported a 168% increase in sales to $1.7 million in third quarter vs. a year ago.
“The results and opportunities that are beginning to emerge today are what we foresaw as a basis for the changes we made in Accesspoint’s business structure as we mapped our plan for driving this company towards profitability,” said Tom Djokovich, Accesspoint’s chief executive.
The company has been seeking new clients for its credit-processing services and has opened 68 new sales offices this year.
“With the training of more than 60 new offices we anticipate an increase of new account activity over the balance of the year,” Djokovich said.
The shift hasn’t been easy.
At one point, eBuilt said it counted four Internet-only e-commerce customers. Then eBuilt finally won business with a brick-and-mortar company, toy retailer K-B Toys Inc., according to Dewey.
“In the first six months, we had K-B Toys,” Dewey said. “Then it was another three to four months before we had another Fortune 500 client. Now it seems as if we have a new one every month.”
But even so, eBuilt has suffered at least some of the same woes as other e-commerce plays. In March, the company laid off about 30% of its staff,only six months after eBuilt had bumped its roster up 100 people. The company also closed offices in San Diego.
Those layoffs, Dewey said, were an effort to match the company’s overhead costs with a significantly changed business environment. Even Fortune 500 companies have reduced spending on the types of services eBuilt provides, so, like other Internet software consulting shops, eBuilt has tried to stay the course.
“We’re really hunkering down,” Dewey said. “We’re trying to stay nimble so we can capitalize on the market when it comes back.”
Back in June, eBuilt raised $8 million in equity financing with Bluestem Capital Co. and the Edgewater Funds to expand its customer base with a focus on big clients.
Other companies have put their employees into overdrive. After Nexgenix Inc., a custom software maker for corporate Web pages, laid off about 30 of the 183 employees at its Irvine headquarters in a companywide restructuring last year, it set what it calls “customer acquisition” targets for each employee. That means each employee must be a salesperson in addition to other duties.
“It’s a great way to maximize output in a down economy,” a Nexgenix spokeswoman said.
The company recently closed deals with H & R; Block Inc. and online car retailer CarsDirect.com Inc.
