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Dell to cut ribbon for new Net exchange

The Dell Marketplace, which will sell products directly from Dell and others, gives the PC maker another way to capitalize on its voluminous Web traffic.

Dell Computer is opening a mall.

The Round Rock,


Gartner analysts Carl Lenz and Kevin Knox say the success Dell has found selling computer hardware over the Internet channel will not necessarily continue with its new online exchange.

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Texas-based computer manufacturer today unveiled the Dell Marketplace, an online exchange for buying products from Dell or select third parties.

The marketplace, which will officially open Oct. 30, will provide Dell with another way to capitalize on its Web traffic. The company's Web site is one of the most active e-commerce sites in the world.

Dell Marketplace will "allow our customers to do commerce online?and allow our customers to open up storefronts on the Web," John Hampton, director of new ventures at Dell, said today during a teleconference. "With Dell Marketplace, we're not just building it for us to sell our products, but to allow our customers to sell as well."

Hampton said yesterday that "for the suppliers, the appeal is that Dell conducts a substantial amount of business online."

Dell will sell its computers on the site, and companies such as Pitney Bowes and 3M also will set up shop there to sell their own products directly to customers, Hampton said. Initially, most of the products will be related to computers, but eventually, the site will carry general office products and "indirect industrial equipment" such as janitorial supplies.

Although Dell currently sells products from other manufacturers through its DellWare and Gigabuys sites, the Marketplace will differ from those venues in that Dell will not sell third-party products itself. Instead, the individual manufacturers will conduct the transaction.

Rather than make a profit from selling products, Dell instead will collect a transaction fee for each purchase, Hampton said. The size of the fee will vary by product. The company will also see revenues from providing integration and hosting services.

"It is a different business model than how DellWare works," Hampton said. Asked if Dell is becoming a retailer, Hampton replied, "I'd say we're operating as a mall owner."

The site was designed in conjunction with Ariba, Lante and Exterprise, an Austin, Texas-based e-commerce software developer.

Pitney Bowes, 3M and Motorola will be three of the initial third parties to sell products on the site. To ensure customer satisfaction, participating companies must adhere to Dell's service guidelines, which outline maximum periods for outages or delivery time.

The Marketplace is one of the first projects out of Dell's relationship e-business group. The group, set up about four months ago, seeks to incubate new business opportunities, Hampton said. Although Hampton is the director of new ventures, the group is not part of Dell's venture capital group.

News.com's Erich Luening contributed to this report.