If you thought the Muppet Show's "Pigs in Space" was strange, consider chickens in cyberspace.
Poultryfirst.com, a New York-based company, made its debut at the International Poultry Exposition in Atlanta earlier this year. Created by Mr Jose Pablo Chaves and Mr Johnny Vega, two young men from Costa Rica, it aims to take a slice of the poultry distribution industry, worth an estimated $25 billion (€26.65 billion) annually.
Poultryfirst is the first portal site established specifically for poultry distribution. It enables buyers and sellers to negotiate products, pricing and conditions and then transact directly with each other. For instance, someone who wants to buy 25,000 tons of corn as feedmeal for chickens could arrange to get it from a supplier in China.
The site was set up to appeal especially to small- and medium-sized poultry producers with the aim of "levelling the playing field" but the "big guys" such as Tyson Foods and Perdue Farms "are having a look", said Mr Chaves, president and founder. The site works by hosting auctions of poultry products like chicken wings, quarter legs, whole chickens as well as grains and feed additives.
The advantage of using the site, said Mr Chaves, is low-cost and worldwide exposure. So far, he said, most interest has come from the United States and Asia, but he is hoping to break into the European market by opening an office in the Netherlands, the biggest poultry equipment supplier in the world. Combined, the United States, Brazil, France, China, Thailand and the Netherlands make up three-quarters of global poultry exports.
"At the moment, our site is basic with just an auction," said Mr Chaves. It uses technology from Moai Technologies of California for the auction aspect, commerce and personalisation tools from Art Technology Group and visitor tracking software from WebTrends Corporation. By the summer, it will have evolved into a community and content site with research tools. "We're building a product catalogue which includes all types of poultry-related information," he said. So, eventually someone could log into the site, do research on poultry providers, arrange for insurance and financing online, order and pay for products and then have them distributed.
"We're going to give the industry a total business-to-business solution," said Mr Chaves.
Unlike many portals, poultry first has avoided taking advertising on the site and makes its money by charging a commission of 1.5 per cent to 4.5 per cent on the value of auction transactions. In addition to 10 staff in its New York office, it has a development office in Costa Rica with a staff of 15.
Since poultryfirst went live on the Web in January, it has hosted 10 auctions. "The difference between us and ebay," said Mr Chaves, "is that ebay generally hosts $6 to $7 transactions. Our average is $100,000 to $150,000 transactions."
To use the online auction, buyers and sellers must complete a one-time registration with poultryfirst. The company verifies that the user is a bona fide poultry producer before allowing them to participate in auctions.
Much like other online auctions, the user then enters the particulars about the product they wish to auction - the number of lots, reserve price, how the product is packaged etc. The details are immediately available on the website and remain there until the auction closes.
While the company is currently self-funding, Mr Chaves said he is "pitching this idea" to venture capitalists. At age 27, he calls himself "the ideas guy". He has been involved in several Internet ventures in Costa Rica since 1996. A year ago, he and Mr Vega "decided we had a great idea and concept. We were sufficiently funded to give it a big boost".
Total investment in poultry first has amounted to $5 million and Mr Chaves thinks "$10 million more and our revenues should get us into the black in the next two years". He anticipates sales to amount to $1.8 million to $2.2 million this year and $5 million next year.
The business is so fragmented worldwide that, he said, poultryfirst can succeed by being focused on one particular industry - poultry - and not trying to sell products like pork or dairy. It can allow small and medium-size producers to participate by removing the geographical and cultural constraints inherent in international trade.
The global business-to-business e-commerce marketplace is expected to be worth some $7 trillion by 2004 and if the people at poultryfirst are betting correctly, then chickens will be part of this revolution.
