In the electronic trading system, suppliers would post offers on the Web site and buyers would post their needs. Colombier would analyze both and present a short list of recommendations to each buyer. If a buyer chose one, Colombier would pay the seller and bill the buyer. The paper would be relabeled with a Colombier brand and shipped directly. Even after the fact, the buyer and seller may never learn each other's identity.
All parties benefit.
Colombier earns a transaction fee, and reduces its risk by avoiding inventory. The seller does not have to let buyers know it has a surplus, and thus can't be bargained down. By the same token, sellers don't know buyers are in a jam, or are small, and thus won't artificially raise the price. The prototype trading system began running in March. The decision support software, for which IBM has filed a patent, should follow several months later.