Start-up Bequester: strength in numbers

Bequester is a Johannesburg-based start-up that hopes to give small businesses the buying power of large ones. Launched as a public beta in November 2011, the site facilitates procurement deals between businesses that want products or services and those that can supply them.

Founded by Thabo Makenete and Grant Monareng, Bequester has been wholly self-funded to date, though Makenete says he and his partner have begun shopping around for investors to prepare for anticipated growth.

In a little over three months, Makenete says about 120 businesses have signed up for the service. Both would-be suppliers and purchasers sign up in the same way, and there is no cost to do so – fees apply when a deal is concluded.

To date, the bulk of sign ups have come from prospective suppliers. According to Makenete, this is a good thing because only once there is a substantial number of potential suppliers bidding against each other will purchaser numbers swell.

The suppliers cover a wide range of industries, the bulk being suppliers of office equipment and consumables and marketing and design services. “We want to get all sorts of suppliers on board,” says Makenete.

Monareng and Makenete come from IT and telecommunications backgrounds. Monareng also has extensive experience in broadcasting and media, while Makenete’s other speciality is supply chain management, which he says prompted the idea to start Bequester.

“I worked in supply chain management for government and realised there was the potential to save a great deal on the procurement side when you have enormous buying power,” Makenete says. Small businesses don’t get the sort of discounts those with volume on their side do, so if we can help them combine their buying power we can save them money.”

He likens it to group buying but says unlike sites like Groupon, Bequester’s focus is on the demand rather than the supply side of the equation. Businesses looking for products or services can either create a request, which is then sent to suppliers for bidding, or they can join an existing one, and this is where the real power of the service lies.

There is no limit to how many companies can pool resources or request the same product or service, but there is a limit of 30 companies that can bid on a single request. Makenete says this is to prevent buyers having to plough through too many bids, which can be as difficult and time-consuming as calling around in the real world — a burden Bequester is trying to alleviate.

Buyers can also rank sellers so that future buyers can make decisions that aren’t informed only by price. Makenete says Bequester isn’t simply about finding the lowest price, but the best product or service, the proximity of the supplier, and other attributes, all of which means the winning bid may not necessarily be the cheapest.

Bequester makes its money when deals happen. Once a bid is accepted, the buyer pays Bequester a “facilitator’s fee” of 8,9% of the bid or a maximum of R4 000, whichever is lower. This payment also serves as a guarantee to the supplier and comes off their quote. The remaining 91,1% is paid to the supplier upon delivery of the service or product in question.

Payment service provider PayFast manages the payment process.

Because both founders are also software developers, they built the front end and interface of Bequester’s website themselves, with much of the back end based on open-source software.

Makenete says the company isn’t focused only on the private sector. It is in talks with the department of trade & industry and rural development agencies. He says as government accounts for so much procurement in SA, it holds a great deal of potential for a service like Bequester.  — Craig Wilson, TechCentral

This section on TechCentral focuses on technology start-ups in SA. The purpose is to profile what our start-up entrepreneurs are doing and to highlight some of the interesting technology ideas coming out of SA. Do you have an interesting tech start-up? Are you doing something out of the ordinary? Why not drop TechCentral a line and tell us about what you’re doing?

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