Vertical Search Engines Look to Connect Buyers and Sellers

There's a new search industry that's popping up around the 'net looking to connect buyers and sellers much more efficiently than those of the popular search engines. GoWholesale is one of them.

The online world appears to be dominated by mega-search engines like Yahoo and Google - where millions of businesses spend billions of dollars per year on pay-per-click advertisements. However, there's a new search industry that's popping up around the 'net looking to connect buyers and sellers much more efficiently than those of the popular search engines. It's the vertical search market, in which the buyers and sellers of specific areas of interest or industries can be found. One such example is Liquidity Services' GoWholesale.com.

Bill Angrick, CEO of GoWholesale spoke with ECommerce-Guide recently to discuss what his company's search engine is about and why the e-commerce world should pay attention to vertical search engines with similar advertising revenue models similar to that of Google's AdWords.

"It's a wholesale industry portal that provides a variety of lead-generation content and has certain community aspects. It's able to provide services through an advertising revenue model. The portal has advertisers that include manufacturers, drop shippers, distributors and importers who would like to generate leads with wholesale buyers," says Angrick.

He says those that buy in bulk and with the idea of sustaining their businesses are the ones most interested in GoWholesale.com. Off-price retailers and power sellers are big users of the site, but the same group also includes online retailers who go through their own branded Web sites and higher-end resellers who buy and add value by either refurbishing or repacking or exporting products.

"The reason our biz has flourished is that buyers are increasingly using the 'net to find wholesale goods," says Angrick.

Angrick cited research surveys that found 64 percent of businesses use search engines to find products and services to drive their economic model.

"With that context, we made decision to create a portal to offer tens of thousands of buyers the ability to gain more relevancy in their search. Google has a vast array of content and links, but you really aren't getting the vertical focus you get on gowholesale. Our site is tailored to buyers who want to buy and advertisers are willing to sell," he says.

"We provide much more relevancy, vertical context (buyers/sellers trying to connect), and information on how to make your business better. For example, we have lists of suppliers for each keyword search. We'll provide a list of those who want to supply, say, women's handbags and also current auctions that have women's handbags for sale," says Angrick.

But GoWholesale isn't strictly a search engine. Angrick says the site is built to support a community of buyers and sellers - it's a wholesale portal. The site includes industry news for certain search keyword and offline trade shows, so there's a lot of context around a specific search. In addition, the site has a community forum in which buyers and sellers share information and post topics of interest so they can collaborate with their peers. Ratings, feedback, original blogs by industry experts and webinars also add value.

"For business owners to get access to a peer group is valuable," he says. "That's a very powerful and content-rich way to interact with the wholesale buyer community. The sellers are interested in the critical mass of buyers we have."

Visitors to GoWholesale may find many similarities to the major search engines, such as sponsored ads in the search results. It's that specific revenue model Angrick says is perfect for wholesalers looking for qualified buyers.

"If I want to generate leads and I can advertise in an offline journal, but I can't track ROI on a day-to-day basis. The PPC ads on GoWhoelsale provide detailed results with up to the minute reporting. We allow advertisers to bid on being prominently placed throughout our search engine network of sites for electronics, apparel, toys and games, etc. You only pay when someone clicks through to your web site," he says.

GoWholesale provides advertisers with tools to improve keyword campaigns and other ROI measurement tools.

GoWolesale also provides textual banner ads linked to keyword searches, similar to Google's AdSense. The syndicated ads generate roughly 9 million product searches per month. This provides a more prominent way to boost advertiser branding exposure. The site also provides e-mail, search page and site sponsorships.

"The landscape of how advertising is done is transforming because the ad community who wants a vertical, targeted audience will get a better transparency. To meet the basic needs of advertisers we offer the highest quality of traffic to generate buyer leads, by providing the largest search network for wholesale participants," says Angrick.

As with other pay-per-click programs, click fraud is a concern among advertisers. However GoWholesale uses 15 different click-fraud measures to make sure only qualified leads click on sponsored ads.

"We truly are qualifying those sites that use our engine to make them relevant to our audience," Angrick says.

"Other important thing is we are evangelizing use of PPC advertising. Wholesalers may not be most innovative aspect of the economy; we help them break through complacency with seminars on PPC and other webinars. We think were in the infancy of where the business is and we think, over time, vertical-specific communities and search engines will be more and more accepted because there's greater value to the advertiser," he adds.

Courting Small Businesses
Angrick says there are over 1,000 advertisers to network so far. GoWholesale.com receives approximately 650,000 unique visitors per month and more than 30,000 keywords are used currently.

"Everyone wins. The buyer gets the most search results and can source product conveniently. It's important to small businesses because they might not have the staff or time. Wholesalers get more qualified searchers. We attract actual buyers, not casual search activity. The traffic we attract is very industry-specific. This business has a self-reinforcing growth cycle," Angrick says.

"One of the reasons we got in this business is, in 1999, we built some of the largest online whole auction markets. We had aggregated about 400,000 professional buyers to complete transactions. We knew those buyers were using search engines to further their business. We know what they're looking for, how they behave, the terminology they use (packaging types, condition, categories, lot sizes). We said, 'Let's use this experience building one of the largest audiences of online buyers and seed this portal.'"

Angrick says small businesses are the primary audience for GoWholesale. Why is that?

"Small businesses aren't dispatching a team to Asia to custom-make goods, they rely on industry specific options. In most case, they are the early adopters. I can go online, immediately access suppliers for 30,000 keywords," he says.

"The majority of people have an offline presence. These are folks who are traditional brick and mortar retailers. They represent largest audience of buyers. Those players are experimenting with their own Web sites to compliment (their offline stores). Increasingly, we're seeing a crossover of offline players to online storefronts. That's been helpful for us," he adds.

Angrick says keywords advertising pricing on GoWholesale is "comparable" to Google AdWords, "which is a great value-proposition because they're getting more qualified traffic. I would expect over time there would be a higher value over keywords, but at this point we're comparable to Google."

Devin Comiskey is the Managing Editor of ECommerce-Guide.

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