Like Alibaba, But Safer: HD Trade Services (YC S12) For Goods Traders

http://techcrunch.com/2012/10/11/like-alibaba-but-safer-yc-backed-hd-trade-services-wants-to-become-the-primary-platform-for-goods-traders-in-china-and-beyond/

by dwshorowitz • 14 years ago

49 31 14 years ago

techcrunch.com

retroafroman• 14 years ago

I'm glad to see start ups taking on problems in the logistics industry. How does your offering for warehouses and 3PLs compare with WMSs currently on the market? Edit: Looks like you operate all in the cloud, is this correct?

dsugarman6• 14 years ago

Exactly. What we do really well is information capture using tablet computers and storing the information directly in the cloud. Tablets can handle signature capture, scanning, photos and video documentation right at check in and check out so all the inventory is always synced. Our notification system and inventory portal makes sure that the 3PLs client is always informed about shipment activity. The biggest difference is probably that we can provide our basic WMS at such a low price because we primarily make our revenue in other ways that build off of this offering. Previously, smaller 3PLs were left out entirely from WMS offerings.

bitwize• 14 years ago

Is that like "wanting to be the guy"?

gallerytungsten• 14 years ago

This seems like the beginning of an interesting idea. But while they're addressing the important issue of inspecting the goods, it seems they're missing a more important concern when sourcing manufacturing in China. Namely, knowing if someone is actually a manufacturer, or just a middleman.

It doesn't take much searching on Alibaba to find several companies offering the exact same item. Often with the exact same photo, with the only difference being the watermarks they slather over the shot.

Another more important service might be to offer on-site quality control. Of course, that might increase the cost over just taking photos, as you'd need people who were fluent in both Chinese (perhaps several dialects) and English; and who had domain expertise for the goods being manufactured.

dsugarman6• 14 years ago

This is very true. You will not always know who is a middleman and they will certainly be on our platform. What we can guarantee is that if you are dealing with someone on our platform, they have never misbehaved before. We have enough picture and video documentation to ban anyone who does, and our network of suppliers is tightly monitored. You should never be scammed even if we did not handle dispute resolution because of our inspection technology that makes sure you can interact with your product before it is paid for and shipped.

You may deal with a middleman, but you certainly will not have to deal with order inaccuracy, bait and switch, low quality products or any other types of scams that are currently saturated in B2B marketplaces.

mistermann• 14 years ago

> What we can guarantee is that if you are dealing with someone on our platform, they have never misbehaved before.

It will be interesting to see how you manage that!

A few things I find sorely lacking with Alibaba and China in general, some of which I'm sure you have in your crosshairs, others not so sure:

1. Language - Obviously English isn't their first language so some complications are to be expected, but:

a. I think there has got to be some serious disconnect going on between people with relatively proficient English speaking and writing skills, and companies that need that skill. I've been in contact with some rather large companies ($25+ million in sales or much more) whose sales people are just helpless.

b. Product Descriptions - sometimes just bad spelling/grammar or honest mistakes, but other times they're just plain wrong - like, differentiating details that are really important are ambiguous, or worse. Perhaps this is deliberate to a degree (which I would also like to see go away)

2. Culture - There's stretching the truth, and then there's lying, and it seems where this line is drawn varies greatly between cultures. It's very frustrating when you're trying to source a product, and every person you contact has it, in fact they have everything. Except they don't. Maybe there's something you could do along the lines of a comprehensive catalog of products, so when they list something, they "have" to tie it to a "fairly" strict item number(s), so I don't have to rely on text searches (which go against dishonest product descriptions). And, if they are doing a deal on 2 items and the buyer needs a 3rd, maybe you could somehow offer collaboration capabilities between sellers, ideally ones that they'd actually want to use (share the profit on a sale perhaps?)

3. Product listings - I'm sure you know all the issues here, but the ones that most bother me are the atrociously low-res pictures, pictures from other unrelated products the seller has listed showing when clicking "next", terrible ambiguous/misleading descriptions, etc.

4. Quality control - With modern technology, why some sellers don't do what your platform offers on their own (provide hi-quality photos, etc) is an absolute mystery to me, so it will be nice if you can show them how to do this, and affordably for them so it doesn't cut into their margins. However, for a lot of sellers, the total lack of quality control is a tremendous benefit to them so they can bait & switch, ship different product than ordered, etc.

5. Affordable Escrow service - as others have mentioned, a lot of sellers like to move transactions off the system. I hope you guys can resist the urge to take too much of a cut of the action and find some affordable way to provide security for the buyer and not cut into profits for the seller.

It's good to see some competition for Alibaba that's for sure, I really hope you guys can pull this off. I wish you the best of luck!

rickdale3• 14 years ago

Having ordered about $30,000 worth of goods from ali baba this year, my experience has been an interesting one.

First off, I started selling electronic cigarettes with custom cartridges. When I found a demand I went to ali baba to get the e-cig kits for cheap. It was easy to find a supplier, but for sure the lady I am dealing with isn't the factory, but she has been good. Few qualms though.

For one, she didn't want to use the ali baba payment setup. So the first payment was a leap of faith. On my second order (for about the same amount of $) she sent me different kits than the first time because one e-cig was longer than the other. I didnt know I was getting a modified kit until I received about 500 of them.

My overall experience with this random company I met through ali baba has been a good one. Each time they have lowered my price and even dealt with the dead units I receive (Over 100 dead chargers thus far... I have been taking them apart and resoldering them myself, but they replace each one). Would be nice to talk to the factory directly, but the people on ali baba really helped me launch a company through an IM window.

dwshorowitz4• 14 years ago

Thanks for your feedback, rickdale! Congrats on launching your business under such uncertainty. We love hearing about experiences through B2B sites, especially Alibaba.com. Although you haven't had any horror stories, which we hear all too frequently, sounds like you've experienced a few curveballs. No more curveballs! Help us build a truly transparent purchasing environment.

rickdale3• 14 years ago

The greatest challenge I have faced through this was transferring the money internationally. My first order I did an international wire transfer from my credit union and it took 7 days, went pretty smooth. My second order the credit union had switched companies for processing wire transfers. Took them over 30 days to finally return my money. They thought it was fraud; I tried to explain to the wire transfer company that I had made the same wire transfer 3 months prior, but they weren't convinced.

My next solution was to try Western Union online. Their system is awesome. Took a couple of days to get my business approved (faxing docs and such) but then I was able to make the transfer no problem. Coincidentally, I messed up the account number and so after a week of the money not showing up in my distributors account Western Union corrected my error within 15 minutes of me realizing it. My third order the money went through in 10 hours and all of the account information was saved from the previous order, making it really simple.

Right now I email back and forth with my 'contact' in China. She is very good and really all I need to order goods. I noticed your site is a lot about tracking the products. I get a DHL tracking number before the products leave the facility and can watch them from HK to US. I don't have photos, but I am sure I could get them. I sorta like the gamble...

How are you guys going to stop companies from intercepting potential customers and getting them to pay directly?

gbraad• 14 years ago

First of all, I live in China (Beijing). Alibaba is mostly a C2C (or at most C2B) platform and is the method offered to foreign countries. It started as a way, similar to eBay, to sell your 'Buy now' products (called Taobao), however it easily enabled small 'business' to establish; individuals started to resell products and act as agents for the factories.

It is much harder to deal with the factory yourself. First of all, the quantities you have to buy are MUCH higer before they even wanna deal with you. Chinese agents mostly can get small quantities. Also, there is a language barrier. English language level is not really high, especially in the area where manufacturing happens. it is really YMMV... they often are not much better than the agents.. From what you tell here, it seems you are dealing with a good agent.

About the original article. What do they mean with 'safer' ? Security? Honesty?

dwshorowitz4• 14 years ago

gbraad, thanks very much for your insights! Your assessment of Alibaba.com's international marketplace is spot on.

Here's what we mean by 'safer'; our competing B2B International Marketplace (soon to be branded) is an integrated ecosystem of logistics service providers (neutral 3rd party logistics warehouses), suppliers and buyers. Our inspection, inventory management, and distribution management suite allows for real-time visibility (http://www.hdtradeservices.com/distributor.php#inspection), and facilitates a hyper-proactive approach to purchasing. The result is an unprecedented level of transparency and security when sourcing, as you can verify quality before your goods are paid for and shipped. Further, all suppliers on our platform will be rigorously vetted, and monitored via our inspection service.

I hope this helps answer your question.

austinlyons• 14 years ago

Looks awesome. Know of anyone currently using their platform? Any feedback?

AVTizzle2• 14 years ago

It seems the platform doesn't open until early 2013.

maxk422• 14 years ago

Dear HD Trade Services: Your javascript email submit handler told me my email was invalid. I hacked the source to accept my email anyway and it went through fine. Please fix that.

dsugarman6• 14 years ago

Thanks for the feedback! We took a look and found that some special characters were not passing our validation. We should have this fixed ASAP.

dsugarman6• 14 years ago

fixed!

maxk422• 14 years ago

For the record, the correct way to validate an email address is to send an email to it. Don't try to validate in javascript, beyond maybe checking for /.+@.+/.

Here's some more information on the topic: http://haacked.com/archive/2007/08/21/i-knew-how-to-validate... [no affiliation]

mckilljoy• 14 years ago

This is an industry that has plenty of room to grow, so I appreciate their work.

Their software doesn't really look like a "competitor" to Alibaba though. It looks more like something you'd use in tandem with the Alibaba marketplace to better keep an eye on your supplier.

AVTizzle2• 14 years ago

Their old software was released before, and yes, it was complimentary.

This article announces a new platform connecting buyers with suppliers. Direct competition for Alibaba.

joelrunyon• 14 years ago

Sorry for the sidenote, but I have to say, seeing a (YC) next to a company name that's not 2 words mashed together caught me by surprise :).

That said, if you can guys can pull this off, it looks like it should be incredibly useful.

dsugarman6• 14 years ago

Thanks!

pjlegato2• 14 years ago

The site appears to handle logistics only. The comparison to AliBaba implies that you can also find sellers/exporters. Can users source goods (i.e. find exporters) on HD, or is it only for managing logistics once you've found a supplier somewhere else?

dsugarman6• 14 years ago

Currently, we only handle logistics. We have been working on our marketplace for some time and we want to launch the beta in early 2013. The purpose of this wait list is to find out who wants to buy what products from where so we can make sure to have only the most qualified suppliers as a part of our network with the launch of our Beta. You can already use our inspection and inventory services if you find a supplier elsewhere, but with the launch of our marketplace you will be able to trade free of risk because we have more documentation than any other service for dispute resolution, if someone misbehaves, they are out.

pjlegato2• 14 years ago

Sounds good. I look forward to seeing the marketplace, thanks.

colinsidoti• 14 years ago

The tagline "Like Alibaba, But Safer" makes me think of Panjiva.com - have you guys heard of them?

(Disclosure: Roommate used to work there)

dwshorowitz4• 14 years ago

colinsidoti, thanks for bringing up Panjiva. We're very familiar with the company, in fact I had an opportunity to meet Josh Green, founder & CEO, at World Trade Week in NYC this past May. We really like what the company is doing. Think of them like the google of international trade related search. Just last week, they announced Global Search, which will seriously bolster their service. Here's an excellent resource for learning more about Panjiva: http://panjiva.com/blog

Tradesparency• 14 years ago

Awesome concept and idea! I hope you succeed so the bad suppliers lose business and the small business owners win.

We are working on solving the same problem with Tradesparency.com, but we are taking a different approach.

Good luck!

Like Alibaba, But Safer: HD Trade Services (YC S12) For Goods Traders

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