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E-COMMERCE PROFILE
XSAG.COM GRABS ATTENTION

Come listen to a story 'bout a man named Breen

Saw that agriculture hadn't made the Net scene

Then one day he created a web site

Changed the ag business and made a million overnight

E-commerce, that is. Dot-com. B-to-b.

- Kevin Maney, USA Today



For a one-year-old, XSAg.com, an e-commerce site for agricultural products, has had its share of milestones and grabbed the attention of not only the ag industry but also the investment community and the national media.

Just months after its January 1999 launch, the site expanded from facilitating agricultural chemical transactions to include seeds and will soon offer equipment and parts, fertilizer and veterinary products. Acting as a neutral market maker, XSAg.com brings buyers and sellers together and provides a seamless e-commerce fulfillment operation, including real-time freight quotes, credit facilities and transfer of funds while maintaining complete anonymity between buyer and seller.

In October, XSAg.com secured a $20 million investment from Morgan Stanley Dean Witter Venture Partners. Guy de Chazal, managing director of the company says, "Morgan Stanley Dean Witter Private Equity is investing in companies that are leading the business-to-business e-commerce revolution in their respective industries. We're confident that XS will become the e-commerce leader for the American farmer's purchases of agricultural products."

The majority of the $20 million will fund site expansion and marketing programs designed to accelerate awareness, understanding and enthusiasm for XSAg.com among the 350,000 targeted American producers and distribution channel members. Marketing plans include advertising, direct marketing and public relations campaigns to deliver the companys strategic positioning to its core audiences.

President & CEO Fulton Breen says, "We must effectively communicate to the American farmer that XSAg.com is much more than the site facilitating the buying and selling of agricultural inputs. The American agricultural industry is increasingly being threatened by lower cost producers of commodities. Just as an exchange floor has brought about efficient global trading of these commodities, XSAg.com allows users to put our exchange floor to work for them buying or selling agricultural inputs," Breen explains.

XSAg.com can cut agricultural input costs by as much as 30 percent. "The grower is the CEO of his company, and he's motivated to use new Internet technologies to cut costs and stay in business," Breen notes.

The process is simple. Through direct sales, and forward and reverse auctions, farmers and suppliers can meet their objectives for buying/selling ag inputs. XSAg.com lets both parties remain anonymous, handles the transaction by debiting escrow accounts and lists itself as the shipper. The company takes charge of pickup and delivery but does not take possession of products.

One question the company is asked is "Doesn't XSAg compete with dealers and distributors for business?" The answer depends on retailers' needs and business strategies. Breen explains that the most important financial objective for business owners is most likely to generate cash flow. The next most important financial priority is to generate a profit.

"XSAg.com allows dealers and distributors to leverage their investment and trade across the entire country. Without any additional investment and no credit risk, dealers and distributors can significantly expand their business base," Breen says.

Breen has more than 20 years of agricultural experience working with Union Carbide and most recently, Rhone-Poulenc as director of marketing and strategic planning for one of the company's agricultural products divisions.

XSAg.com's humble beginnings actually trace back to Breen's love affair with Harley Davidson motorcycles. XSAg's business plan materialized while he searched for motorcycle parts to supplement his hobby. He became frustrated that distributors carried a lot of parts but rarely the ones he sought, so he set up a Harley Davidson enthusiasts central clearinghouse to match buyers and sellers via fax.

The rest is history - or for this growing one-year-old, history in the making. AM



Angela Bendorf is a public relations specialist based out of Raleigh, N.C.


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