Way2Bid bids farewell to Internet business

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Way2Bid, a Springfield-based Internet- procurement company for governments and schools, has closed.|ret||ret||tab|

The decision was made April 22 and stockholders voted to close the company on May 13. Way2Bid downsized its staff from 35 to 23 in mid-February.|ret||ret||tab|

Chief Executive Officer Bill Perkin has no question that Way2Bid could have survived.|ret||ret||tab|

"We had, actually, plenty of investments and could have kept the company going another year or two on the dollars we had," he said. But after evaluating the market's present and projected response, continuing seemed inadvisable, Perkin said.|ret||ret||tab|

Way2Bid initially provided software to make it easier for institutions to go through the cumbersome and paper-laden process of obtaining bids from vendors. When Perkin joined the corporation in January 2000, Way2Bid transitioned to an Internet-based service.|ret||ret||tab|

Institutions wishing to make purchases that required them to obtain bids could fill out a form online, click on vendors from whom they desired responses, and the necessary information would be transferred. Vendors could then place bids, and when the institution had established a contract, any authorized purchaser could purchase from that contract.|ret||ret||tab|

For providing this technology, Way2Bid charged 1.25 percent of the contract amount. |ret||ret||tab|

Perkin said the concept is viable but added that the public sector is slow to act on anything new. To help increase interest, Way2Bid staff made in-person sales calls and spent a lot of time training institutional buyers. They also worked with vendors to help them get started in the program and even sometimes put out the bids. |ret||ret||tab|

But all that extra service became very labor intensive. "We feel like the pricing was right if the service would have matched," Perkin said. "We really weren't priced to do that."|ret||ret||tab|

Feedback from Way2Bid customers showed that they were attracted to the service, but they weren't yet able to do more of the work themselves and wern't willing to pay increased fees. "They liked the service as long as we did everything," Perkin said, "but they really didn't want to pay for that kind of service and just weren't ready to take it on themselves."|ret||ret||tab|

When Way2Bid consulted 15 to 20 state purchasing directors and several school administrators and education co-ops to see if the market would support an increased fee, almost without exception they wanted to use the online service. Unfortunately, they also said they didn't have the budget for it, but would like to join in the next year or two.|ret||ret||tab|

That left Way2Bid leaders with some tough choices. |ret||ret||tab|

"It started looking like we had to do one of two things," Perkin said. "Either cut way back to minimal staff and just waitand still not be assured (of success)or, we had between $3 and $4 million and about 35 investors, and we could take that and disperse it among the shareholders so they could get something back now and decide later what to do with their investment money."|ret||ret||tab|

Way2Bid is currently operating with just four employees after letting the others go in late April. The system will remain on-line through the end of May. Perkin said he and one other person will remain through the end of June to close out the corporation's financial dealings.|ret||ret||tab|

Still, Perkin believes institutions and vendors haven't seen the last of Way2Bid. He said the four original founders Darren Henderson, Joe Herman, Erick Burgess and Ted Tabor plan to reinvest some of the cash they receive from the payout. They intend to purchase some of the equipment and try to restart the business on a smaller basis, keeping costs low so they can survive on a handful of clients and be ready when the market catches up to the technology.|ret||ret||tab|

They'll have a good chance, Perkin believes. He compared Way2Bid's technology with that of cell phones, e-mail, and faxes technologies that existed for several years before the market caught up with them. |ret||ret||tab|

"We were a little ahead of our time," he said. "The idea is still there. I still believe the government and schools are going to end up using it."|ret||ret||tab|

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