Reibus Gets Leg Up in Digital B2B Race
The race has been on to develop a one-of-a-kind online marketplace for the trading of metal products in the industrial economy, with Reibus staking its claim to become the Amazon.com of metal distribution.
The online B2B platform has been operating for nearly a year now and is focused on bringing buyers and sellers of metal together in a single, digital location. “In a nutshell, we’re trying to smooth out the supply chain and eliminate the friction that goes on between all the participants,” says Chief Revenue Officer Jon Haley.
Reibus International is based in Peachtree Corners, Ga. It was co-founded by John Armstrong and David Bain, metal industry veterans who have worked in various roles throughout the supply chain and who were frustrated by the inefficiencies that have become the norm in the metals space. It defines itself not by the products featured on the site, but rather its process. “First and foremost, we classify as a technology company that happens to know a lot about steel and aluminum and the sourcing that goes on in that world,” Armstrong says.
Currently, the site has the infrastructure to support hot-rolled, cold-rolled, deep-drawn, pre-painted, galvanized and galvalume steel coils, plus flat sheets of steel, aluminum and copper.
Reibus is targeting players throughout the metals industry, from mills and service centers onto fabricators and end users. The more supply chain players who become participants, the more beneficial the experience will be for all involved.
Service centers, quite obviously, can find themselves on either side of the transaction. Distributors looking to offload metal can post the material on the site to find willing buyers. “Rather than chasing a buyer with emails and phone calls, we have a standard process. You upload the information in our system and after verification by Reibus, that material is available to a wide audience,” Armstrong says.
Similarly, service centers regularly get orders for materials they don’t have in stock, and they must scramble to find the product to satisfy customer requirements. The site can save 10-15 phone calls trying to track down the elusive items. Additionally, the site provides a place for buyers to post an RFQ for materials not currently listed. The team will try to source the material directly from suppliers on behalf of customers.
The entire transaction is transparent. “The pricing is all there. We don’t say, ‘Call us and negotiate a price.’ You can buy one coil or a few flat sheets or a whole truckload,” Haley says.
The idea isn’t to replace contract or traditional programs that exist between suppliers and consumers. Rather, it’s to help fill in the gaps that exist in the imperfect supply chain. And if a supplier and customer meet through the site and develop a more permanent or contract-based relationship, that’s OK with the operators.
“The common issue is there’s a constant imbalance between the time of forecast and when the material arrives – the prices change, the market changes, weather events occur – all of those things that make forecasting really difficult. Because of the constant imbalance, inventory management is very inefficient. What we’ve tried to do is create something that enables players in the market to smooth out those peaks and troughs,” Armstrong says.
Haley believes the site will be an invaluable tool to distributors and fabricators. “We’re bringing the whole universe to them,” he says of the small and midsize players. Once an order is filled, Reibus essentially takes care of the rest. Credit is handled on the site (a new credit tool has just been rolled out for customers), and the company has freight forwarders taking care of shipping.
Freight is a key concern. Unlike the situation with most online retail transactions where purchases can be made from anywhere and shipped via the mail, that doesn’t work with steel or aluminum coils. Freight costs are prohibitive. The site identifies where all of the material is originating from, and how the freight costs will be factored into the price. As more customers come onto the site, transportation issues will be mitigated by volume.
In the process of building the site, another large task was in getting each customer—supplier and purchaser—to use the same terminology. “The way people describe products is very challenging. Some people start with gauge. Some start with grades. Some start with weight. Some start with coating. We needed a standard process and nomenclature listing the key attributes, and feedback from the industry for the most normal way of doing it,” Armstrong says. “We were trying to find a standard nomenclature, so when someone comes to the site, it’s really simple. We think we’ve achieved that.”
Armstrong says one benefit of the site is its independence. The company does not own material. It doesn’t operate a slitting or cut-to-length line. Suppliers need not worry that Reibus will be stealing customers away. “We’re not there to compete against our customers. We’re there to enable everybody to participate in the market.”
At the moment, the site sources domestic metals, though there are plans to expand into other product categories such as paper in the future. Expanding internationally is also a real possibility with interest being expressed already in Europe and other markets.
Haley believes the current uncertainty involving foreign steel and its impact on domestic pricing make Reibus an ideal solution. He says, “Any time you have a lot of price uncertainty in the market, you typically don’t want to take a massive position on large inventories. That’s how Reibus fills in the gap for customers.”
When the company is ready to list imported metals, Reibus vows it will only include reputable sources and mill certification will continue to be required. “That’s how we protect us and our sellers. We never want to get in trouble with a customer over a coil that is defective,” Haley says.
The site will continue to evolve by offering more features. Thus far, the company has chosen a more measured development, making sure it could handle the demands of its customers. Building trust in an industry where one mistake could cost someone his or her job is paramount. However, Haley and Armstrong anticipate that activity will pick up rapidly as supply chain members become fully aware of, and comfortable with, Reibus.
“If we help our customers with just a small percentage of their total business, we will become a very large player in short order,” says Armstrong. Just look at the metals industry in North America alone. It’s valued at over $280 billion. We’re already trading with very large service centers and mills, so we’re confident in our growth projections. But more than that, we’re excited about providing a platform that makes everyone’s jobs in the metals industry easier.”
see the full article on Metal Center News