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NEW E-MARKETPLACE is banking on OSB buyers searching for high efficiencies, low prices.

The Merchant Magazine asked Silvaris president and c.e.o. Kurt Bray to walk us through his latest venture and share how it plans to beat the odds.

lMerchantl Wttat does it mean to be a "technology. powered trading house"?

[Bray] Well, it means that we don't trade in the typical wholesale fashion, heavily dependent on individual salespeople who strive to protect their own books of business first and foremost. I started this company in 2000 with my colleague Steve Malloy (now chief technology officer), who was a guy with a deep background in the software industry, whereas I came from the lumber business.

We sat down one day and discussed how we could make a mark in this industry. And we realized that what the lumber wholesale business needed was someone to tap into the virtually untouched potential of technology to create better efficiencies in buying and selling.

Wtrat is OSBMarket?

It is a website designed to give the downfall OSB industry an online presence. Anyone can visit the site (www.osbmarket.com) and view available inventory and current prices. We track our sales data and display it as the "TrueMarket Index," which gives buyers a view of what actual prices have been over a period of time. Buyers can set up an account with Silvaris through the site and purchase truckloads of OSB delivered anywhere within the region they buy in.

Is all the OSB offered offgrade? How are buyers assured of the quality of products they purchase?

Yes, at this point all the OSB is off-grade. The downfall market is a whole different thing than the commodity market, and Silvaris specializes in downfall products through its trading arm, LowGradelumber.

We've developed two "grades" ofoff-grade OSB classifications: LowGradel and LowGrade2. These two grade names reflect the better srade and second downfall OSB produced by mills who have different names for the same types of products. The mills have responded very well to the idea of generalizing the grades to two simple definitions. We have a full description of what each grade means on the site and a chart that shows the corresponding mill grade names that customers are already familiar with.

Wtry OSB? Is there anything about this particular product that lends it to marketing online?

OSB is a great product to market online. OSB is relatively uniform in terms of standard sizes produced, and is something that is used for many different types of applications, making it easier to sell in a wide range of locations to a wide range of buyers. Buyers are very familiar with what they purchase on a regular basis so there is no guesswork in ordering online.

In addition, we have a lot of solid relationships with major OSB producers, which allows us to have a nationwide presence in downfall OSB. Because we have traders buying and selling OSB all day long, we have a really good feel for what the prices are in the OSBMarket regions. We can update prices in real time on the site, so buyers can visit the site and see the most current market information available.

Wtrat are OSBMarket regions?

We built regions around our major supply centers and logistics contracts. OSBMarket prices are TrueMarket ' prices, which means delivered prices to anywhere within that region.

Currently we are selling in seven regions, primarily in the East, Midwest and Southwest. We will be rolling out other regions as we firm up supply centers in those areas.

Whe.e do you plan to go from here?

Up. Online purchases of OSB are three times as high as we expected in the first few months. Buyers tell us they love the convenience of the online buying process, and even more than that they love to be able to come online anytime and see where the market prices are. The pricing on OSBMarket is aggressive, and customers get the best value for their money.

Our goal is to be the price leader in the market and give the customers a great venue to transact OSB anytime day or night. We believe that e-commerce is a wave of the future in this industry, just like it has been in so many others, and we plan to spearhead the effort at getting there.

Ottter online marketplaces for buitding materials, some with very deep pockets, have come and gone. Critics have blamed the impersonal nature of the Internet. which contrasts with the personal nature of the wood products industry. How has Silvaris addressed this challenge in designing OSBMarket?

We really think this is an issue of timing and adaptation. Some industries, such as securities, were quick to respond to the "Internet revolution." However, lumber trading is a much more traditional industry and has adopted technology much more slowly. Many online marketplaces have attempted to force wood products buyers to change the way they buy.

We provide an alternative to the way buyers buy OSB today. They can still buy it over the telephone from our traders. OSBMarket is really simple and easy to use, and so far even the most non-technical users have agreed with that. We are managing it carefully to make sure our prices are competitive, which makes taking those few easy clicks pretty motivating.

We are not trying to keep customers from talking to us personally. We are just trying to make it easier for them to place their orders and save the phone calls for more complicated issues. This efficiency is beneficial to everyone.

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