Wells Fargo & Co. has started an Internet procurement service site as part of an overall plan to serve its small-business customers better.
Through the site, firms that are too small to participate in the complex procurement marketplaces being developed for larger companies can get discounts ranging from 10% to 40% on office supplies.
Wells' main target is companies with between one and five employees. Most e-procurement sites target businesses with sales of $10 million or more and must be integrated with a company's purchase orders, accounts payable department, and accounting system.
"We are looking at companies that have no purchasing department," said Wendy Quast, vice president of business Internet services at Wells Fargo. "We're trying to save our small-business customers time and money and make their lives more simple."
The site, developed with software from Pointspeed Inc. of San Mateo, Calif., and introduced Aug. 1, aggregates various business services for companies, such as software, telecommunications services, and shipping. Purchases can be made using credit and debit cards. Eventually it will utilize other payment methods currently in development.
The San Francisco banking company began planning its online courtship of small businesses in December. Five months later it launched its Small Business Resource Center site, which provides information about customized banking services, business tools, relevant articles, and weather.
The addition of e-procurement services, as well as e-mail, represents the second phase of the project. The third phase, which will add services related to human resources, travel, and legal issues, will be launched this year.
The ultimate goal is to offer a range of services on one site, so small businesses "will stay on that site and use it all day long," Ms. Quast said.
The number of people using the site already has "grown exponentially," she said, though she would not give exact figures.
Wells Fargo surveyed more than 30 companies before selecting Pointspeed, largely because of its strategy of partnering and co-branding.
"We didn't want competition from a company that had its own customers," Ms. Quast said. "We wanted to customize it for our portal, for our customers, to give them what they want."
The 18-month-old Pointspeed, which has yet to turn a profit, will host the e-procurement service on behalf of Wells. "We do all supplier management," said Ron Croce, chief operating officer of Pointspeed. "All vendors are selected by us, and we manage the relationships. We take all the demand and aggregate it to get favorable prices. Customers get discounts they wouldn't otherwise get."
After the contract with Pointspeed was signed, Wells' strategic investment group participated in the third round of private financing for the venture-backed firm.
