Epylon.com, a Web marketplace aimed at the lucrative education market, is going online next week and will offer school districts one-stop shopping for everything from pens and paper to computers and landscaping supplies. The San Francisco-based company has lined up retailers such as General Electric Supply, Office Depot and Barnesandnoble.com to offer products and services.
More than 500 school districts have signed up as customers, including eight of the largest school districts in California, among them Los Angeles Unified, the nation's second largest.
However, success is by no means guaranteed; Epylon must compete against many companies that offer similar products and services.
For example, Sears and Oracle announced in February that they were building a retail exchange called GlobalNetXchange to connect 50,000 suppliers and distributors and stock a wide range of retail merchandise. This week, eBay said it is launching a business-to-business trading site targeting the lucrative and growing small-business market.
Still, many believe that the size of the market is large enough to support several players. Nationwide, schools spend $84 billion a year on supplies for K-12 schools and another $60 billion at the university level.
"To the extent that districts receive improved services at lower costs, this will be a huge win for school districts," said Forrester Research associate analyst Matt Sanders. "But it remains to be seen if the company can pull it off."
That's because the e-business market is red-hot and already crowded. Every day, companies are announcing business-to-business portals and marketplaces that cater to manufacturers, wholesalers and retailers. The business-to-business market is expected to earn $131 billion in 1999, and some analysts estimate it could go as high as $7.3 trillion by 2004.
Chairman Kelly Blanton, a former educator, said Epylon will help schools that struggle to spend limited funds effectively. "I always got a dollar to do a $1.25 job," said Blanton, a school administrator for 40 years and former superintendent of Kern County School District in California.
Mike Kovalchik, senior business director at San Juan School District in California, said that school districts need a one-stop shopping area dedicated to their special needs.
The San Juan district, which has signed up with Epylon, spends $153 million g a year on a dizzying range of goods. Kovalchik said that he and his five-person staff process more than 17,000 purchasing requests a year, leaving little time to hunt for bargains.
"It's highly unlikely for our buyers to call around town on a $1,200 purchase just to save $50 or $60," Kovalchik said. "It's just not efficient."
What Epylon is offering is a place where school administrators can find many of the supplies they need, compare prices and order that day. In theory, this should speed delivery of goods, save administrators time and aid them in finding the lowest prices.
Epylon won't charge school districts to use the site. Instead, the company plans to make money by charging suppliers a transaction fee, Epylon chief executive officer Stephen George said.
"We can help solve business problems in schools that will ultimately allow the dollars to go to the classroom," he said.
Epylon's investors include Intel and venture capital firm Highland Capital Partners. It recently completed a $30 million second round of funding.