New online exchange will give minority suppliers global reach

By Mark Brunelli -- Purchasing, 5/18/2000

A former General Motors executive, Roy S. Roberts, recently said he is co-founding an online marketplace that will give buyers from every industry the opportunity to do business with minority suppliers from all over the country.

Roberts says www.M-Xchange.com will be a horizontal marketplace that aggregates minority suppliers regardless of the industry they serve. He says it will stretch across every vertical (industry-specific) electronic marketplace on the Web and will offer buyers the opportunity to more easily meet their organization's requirements for doing business with minority-owned companies.

"I announced my retirement from General Motors in February," says Roberts, who left GM as group vice president of North American vehicle sales, services and marketing, after seventeen years of moving up the corporate ladder. "I had lots of interest in the Internet and e-commerce. As I looked at the horizon, I saw that nobody was looking at minority procurement on a national level."

Roberts, who was presented with the American Success Award from President George Bush in a White House Rose Garden ceremony in 1989, is co-founding the M-Xchange with Gary Wasserman, president of Allied Metals Corp., a highly specialized steel company.

Throughout history minority-owned suppliers have had fewer resources than bigger companies. Roberts says M-Xchange will serve as an equalizer that will allow minority suppliers to extend their reaches across the globe.

"By their very nature you'll find that [minority-owned suppliers] are smaller, in some regards undercapitalized, and sometimes lacking all the skills they need to do some jobs," says Roberts. "This is the beauty of what we're trying to put in place. If we can provide an avenue for good minority-owned companies to grow, they will become better suppliers, purchasers will become more satisfied, and the U.S will be a better place."

In speaking to buyers from many different industries, Roberts says he has learned that people are more than willing to do business with minority-owned suppliers, but they can't always locate the right ones.

"It's been my experience that if you go into any company at any time and you ask them if they do business with minority-owned suppliers, they will tell you yes. Then they say they'd like to do more, but just can't find suppliers," Roberts says. "They're telling the truth. "[The buyers] don't have the reach and some minority-owned suppliers don't have the reach to get to these customers." According to Roberts, M-Xchange will be the "connecting bridge that gets people together and gets people doing business."

The plan calls for the exchange to be launched and fully operational during the first week of August. Roberts says many particulars of the site are yet to be worked out, but like many online exchanges, buyers will be charged a finders' fee when they use the site to close a deal with a minority-owned business. Most likely, he says, the fee will be based on a sliding scale ranging between 1%-2.5% of the contracts formed.

M-Xchange will be very easy to use, says Roberts, and it will eventually offer value-added services to compliment its sourcing capabilities. As an example of the exchange's ease of use, Roberts says that if a buyer wants to purchase plastics from a minority-owned business, they will simply need to log onto the site and click on the plastics link, yielding a list of all minority-owned plastics suppliers in the country.

"We'll have a catalog on each one of them," he says. "You will be able to know who the chairperson is, who the board is, how long they've been in business, what kind of customer base they have. Suppliers can also list prices. You'll see a full catalog for each minority-owned supplier."

Roberts says the exchange will also offer consulting services for suppliers that are new to doing business over the Internet. "For those who are not deeply entrenched in Internet commerce or Web-based operations, we want to teach them."

Roberts is proud of the fact that the Reverend Jesse Jackson was on hand on March 21 when it was announced that M-Xchange would go live. "It was great to have him with us because I think he, as well as the government, has said the Internet is central to economic equity and to social and political equality. If we can't get people participating in this process, then we're going to have the haves and the have-nots."

Roberts says the offices of M-Xchange are currently headquartered in Troy, Mich., but the company is planning a move to Detroit. "We're going to create a little Silicon Valley in gasoline alley," he says.