As much as Amazon revolutionized the business-to-consumer market by offering an online marketplace that has largely left the brick-and-mortar business model crumbling in ruins, the oilfield marketplace has largely continued on in time-tested fashion, as follows:
A buyer looking for pumps or valves gets out a printed directory or phone book, or goes through phone numbers in their smartphone contact list. He or she spends an hour or more making 3-5 calls asking for bids. The salespeople receiving the calls then examine their inventory and spend a couple of hours or more creating a bid, which they email to the prospective buyer—knowing that they have about a one-in-five chance of making the sale after all that work.
For Trunkline cofounder Amber Voithofer, PE, the idea for a pick-and-click alternative came about at a dinner meeting in November of 2018, where she met the person who would become Trunkline’s other cofounder—Joseph Chrasta. This was almost the classic “plan-drawn-on-a-dinner-napkin” cliché. But not quite.
“I was talking [to Joseph] about how it’s crazy that we cannot find anything oilfield online,” she said. “It’s crazy that we can’t find information or pricing or—anything. We really don’t have any resources other than calling the vendors.” And after making that call there can be a long wait for the vendor to send back the bid.
A third generation oilfield descendant, Voithofer had spent 15 years in the field and, more recently, as a consultant, where she had opportunity to make many of those exploratory calls and experience many of those long waits for responses.
Upon hearing Voithofer’s frustrations, Chrasta suggested another meeting to discuss ideas for an online marketplace that he had been exploring.
At their next meeting Chrasta revealed that he had built a prototype more as a directory than as a marketplace. Voithofer suggested that the directory information was only a start—that the website should look more like existing consumer-based websites, where prospective buyers can see actual products and pricing that would speed the buying process.
She wanted to see a search bar where a buyer could type in a product, and the website would populate a list of vendors who had that item, its pricing and availability, along with reviews and ratings. “At the end of the day,” she explained, “you want to know who had the product, first, and then you want to pick from who has that product available based on the company—if you’ve worked with them before, on their reviews, ratings, and availability.”
Voithofer sees the online reviews as a challenge at the start, but well worth the effort. She cited a case where a vendor working with a company in the Powder River Basin would be eliminated from the vendor list due to bad services—only to turn up working with another office of the same company a few days later in the Permian or elsewhere. An online review would help spread the news—good or bad—about a vendor.
In the startup phase Trunkline and other online marketplaces face a sort of chicken-or-the-egg situation of getting vendors versus buyers. For Voithofer, getting the vendors comes first.
“The first step on our side is, get the vendors interested, then get their products on, and then try to get them sales on those products. Then we’re going to try to get the customers to get reviews on them for their products and for the vendors.”
For the website development they started with a third party developer then decided it would be better to have Chrasta do the development himself.
They launched the current version of the website around the first of August.
Voithofer noted that she and Chrasta are a sort of yin and yang, whose diverse personalities make the division of labor easy. Chrasta is the technical guru who prefers to work in the background with programming and setup. Voithofer does what she calls the “front-facing” work of talking to vendors and buyers and the media.
Unlike Amazon, which was the actual vendor for books and other items and only later began to include other vendors directly, Trunkline’s mission is to simply connect vendors and buyers. They do directly sell some “swag” like socks and hats with Trunkline-related images—which have actually been very popular—but that’s the limit.
Originally published here: https://pboilandgasmagazine.com/just-a-click-away/