“This changes everything.”
Just a few years ago, that was the mantra of the e-business evangelists. Between that platitude and the equally common “it's a whole new paradigm,” this message was made clear to any lingering nonbelievers: Business would never be the same.
And, in a way, it's true. The Internet has changed the business landscape, even in the plastics industry.
But absolutely not the way the evangelists expected. As proof, consider the decision by Omnexus' shareholder companies to pull the plug on the virtual marketplace.
Three years ago, it seemed that everyone had an idea to start an electronic marketplace. Here's how it would work: You would set up a Web site to sell products to plastics processors, arrange to take a small percentage of each deal, either from the buyer or the seller, and then sit back and watch the cash fly in the window.
But it didn't work. Omnexus, PlasticsNet.com and others couldn't win enough business to cover their expenses. Why did they fail? Everyone involved has a theory. Mine relies on how I personally use the Internet.
Think about it this way: How did the Internet change the way you buy a car? If you're like me, you use the Web to gather information — pricing, trade-in value, rebates, financing, options, what's in stock. But when the time comes to actually buy, I go to the dealer with my wife, just like the old days, and talk to a sales person and test drive a few cars.
The story is similar when I travel. I check pricing online, comparing the cost of flights from various airports, and I check the available arrival and departure times. Then, armed with that information, I either call a travel agent or book the trip using Web sites of travel-related firms where I already have a business relationship.
I know there are Web sites designed to sell me cars and travel services. I use them to collect information, but rarely to buy anything. Am I missing some bargains? Maybe. But the information I get online is so good, I'm satisfied that I'm getting a fair deal.
So the Internet information explosion has changed the way I buy, but not in the radical way you may have predicted three years ago.
My theory is the plastics industry is operating the same way.
Web sites like Omnexus were banking on radical change, but most processors weren't ready. Without immediate, widespread adoption of their business plan, they couldn't maintain their expensive infrastructure. Face it, the past few years have not been a great time for a new middleman to try to win even a small share of the plastics business.
Finally, a postscript on the story: To be fair, it's a little misleading to say all e-marketplaces have disappeared. A handful are around, including some smaller ones that never aimed to be all things to all processors. Even some of the high-profile firms that bit the dust still exist in cyberspace — even if the companies that own them aren't doing much to promote them anymore.
So perhaps that bare-bones infrastructure eventually will benefit from an e-business revolution.