E-commerce Offers Life Scientists Purchasing Options

Kim Ha uses the Internet to order buffers, enzymes, and other equipment. It's the electronic age. You communicate via E-mail. You surf the World Wide Web for everything from the local weather forecast to cheap airline tickets. Why not buy lab supplies over the Internet? With about 2,500 companies selling products to life scientists and more than 15,000 new products introduced each year, ordering lab supplies the traditional way can be a time-consuming task--maybe three to six hours a week searching for and procuring products using printed catalogs and purchase orders. A number of companies now say those hours can be reduced to minutes by signing onto their Internet sites, browsing their online catalogs, and buying. Electronic commerce, or E-commerce, is growing rapidly, and it's not just in consumer sales. "Business-to-business E-commerce is four to five times the size of business-to-consumer," says Victor Rosenberg, associate professor at the school of information at the University of Michigan, and board member of the American Society for Information Science. Rosenberg is "on loan" to the United States Department of Commerce in Washington, D.C., working on issues relating to E-commerce and the government's role in it. On the one hand, says Rosenberg, E-commerce "gives small and medium-size businesses access to the world." However, it is a disadvantage for suppliers who cannot sell at the lowest price. "E-commerce is not just buying and selling. It's restructuring businesses to function in this global network environment ... We just don't know what all the effects are going to be on the economy." E-commerce, by definition, is any form of business transaction conducted electronically using telecommunications networks. Transactions occur between companies, between companies and their customers, or between companies and public administrations. E-commerce includes: electronic trading of goods, services, and electronic material. advertising and promotion of products and services. pre- and post-sales support. electronic procurement and support for shared business processes. The SciQuest home page Rosenberg explains, "The initial stage of E-commerce, which is where we are now, is putting 'brochureware' on the Net. You can read it there or on paper. You're doing what you would do conventionally, but you're doing it on the Internet." New products can be added without reprinting a catalog, and prices can be changed instantly. Customers can search for a variety of suppliers' products and purchase them from a single source. E-commerce sites offer Web portals, or virtual gateways, to a myriad of products. How those products physically get from manufacturer to wholesaler or distributor to user, however, can vary. Some companies are true distributors who stock and ship products, and others are virtual distributors, who act as middlemen between users and suppliers. Business models for E- commerce sites vary widely. Life scientists can buy instruments, chemicals, and various supplies through Web portals designed to help them find goods and compare suppliers' prices. A buyer can search applicable data on products and manufacturers in a few minutes, find out if an item is available, and order it. "Scientists always want something that won't take up much of our time, because we'd rather spend it at the lab bench," comments Kim Ha, a scientist and lab manager at Eos Biotechnology in South San Francisco, Calif. "E-commerce is a really positive experience that takes care of the front-end aspects of purchasing, then handles back-end concerns with accounting mechanisms." Ha, who conducts cell and molecular biology procedures, purchases tissue culture media, buffers, enzymes, and reagents. She previously had to order for her entire laboratory using a complicated requisition and approval matrix. Now all ordering is done by individual researchers, reducing her administrative work by an hour a day. "We can put spending limits in place, according to someone's position in the company, or electronically route the purchase to a supervisor for approval. ... We can get 24-hour turnaround or two-day ground shipment." E-commerce can improve efficiency, asserts Wayne Litaker, assistant professor of molecular biology and biotechnology at the University of North Carolina, Chapel Hill. "Our purchasing department says to make up a separate purchase order for every different company, so we spend a lot of time on useless paper." However, Litaker says that his department can go online and obtain oligonucleotides in two days. "Online shopping is still in its infancy, but I think it's going to grow," Litaker projects. "The promise is there. Once more companies join, it will snowball. It will take about one to two years to perfect the system, but you can order just about anything [online] now." Anderson Unicom Group, based in Yorba Linda, Calif., lists 625,000 items in its database, according to Roger Anderson, president. Anderson Unicom recently introduced OC QuickStart, an electronic catalog partnership program. OC QuickStart is open to all suppliers of electronic procurement software and systems to the biotechnology, biopharmaceutical, chemical, and academic markets. "The information in Anderson Unicom Group's catalog is grouped by product category, creating one large searchable, comparative catalog," Anderson explains. "The organizational structure enables users to compare like products from multiple suppliers and to select the best product for their situation." LabGate has 750,000 products from 300 vendors on its Web site, according to Richard Chin, cofounder. The San Leandro, Calif., company features biochemicals, plastics, disposables, electrophoresis instruments, and used equipment. "We provide comparison tables in a vendor-neutral platform," he says. Anderson Unicom Group * www.atcg.com BioWorld * www.bioworld.com CambridgeSoft Corp. www.chemstore.com (software) www.chemacx.com (chemicals) Chemdex Corporation * www.chemdex.com LabGate * www.labgate.com SciQuest and LabDeals * www.sciquest.com Synergistic Media Network * www.biospace.com As Scott Andrews, who founded SciQuest in 1995, explains, "It takes too much time to sort through catalogs and go through procurement procedures for hundreds of suppliers. It's very costly for both the laboratory and the supplier." Andrews says that his site will give buyers access to a broad range of products quickly and conveniently, 24 hours a day, seven days a week, while consolidating the ordering process, reducing accounts-payable transactions, and saving time. SciQuest, in Research Triangle Park, N.C., features scientific products used by the pharmaceutical, biotechnology, university, and industrial markets. Its interactive buyer's guide includes chemicals, supplies, and equipment from 3,500 suppliers; the E-commerce network will include 150 to 200 suppliers, according to Andrews. LabDeals, a SciQuest subsidiary, features surplus life science products that often are sold at 50 percent off the regular purchase price. "It's a solution for inefficiency in the market," says Peyton Anderson, SciQuest vice president of business development. David Perry, who started Chemdex in 1997, sees the life sciences--with sophisticated users of numerous technical products--as an ideal market for electronic commerce, or E-commerce. Chemdex, which focuses on biochemicals, has a database of 150,000 products from 150 suppliers. Automated work-flow approval processes, consolidated and automated invoicing and billing, and systems integration bring cost reductions and more effective purchasing to enterprises, Perry says. On the Chemdex Web site, passwords can trigger automatic entry of information such as the proper cost center in purchase order forms, and business rules can preset spending limits and approval cycles. CambridgeSoft Corp. has launched two E-commerce Web sites--one that offers software from the Cambridge, Mass., company and other software vendors, and one that enables life scientists to search by chemical name or structure and purchase chemicals online. Founded in 1986, the self-funded private company has more than 100 products online and expects to add labware and equipment, according to Michael McManus, vice president of marketing. BioWorld, created in 1997, specializes in reports and directories about the life sciences. "People can access the information they want when they need it," explains Marcus Underwood, director of special projects for the Atlanta-based company. "They can pay per view or subscribe to the service." E-commerce can be convenient for both buyer and seller, Rosenberg says, but he points out that a number of issues have yet to be resolved, due to the technology's "vulnerability to misuse, fraud, and abuse." Although some of the security and privacy issues relate more to consumers than labs, identity, theft, and the transfer of goods and considerable funds could pose problems for both sellers and users. But Rosenberg feels the perception that credit card numbers are unsafe on the Internet is overblown. Underwood of BioWorld agrees on that point: "Putting a credit card number online is no less safe than giving it to the local gas station attendant. Online vendors have a very large business at stake and would never do anything that was insecure." Ilene Schneider and Larry Hand contributed to this report.

E-commerce Offers Life Scientists Purchasing Options

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