The New Face of E-commerce

Story Elements:

The First “Disintermediator”

Elgrande.com (http://www.elgrande.com) is the first of a new e-commerce
category, the first true “disintermediator”. Disintermediation is the
bypassing of the middle layers (distributors, brokers, warehousers and
retailers) of the traditional retail supply chain and eliminating the
retail markup.

Creating the New Model for E-commerce
Information technology research firms, such as Gartner Group, Jupiter, and
Forrester Research, predict that the face of e-commerce will give way to a
new model based on disintermediation. They also predict the emergence of
independent consumer information corporations (much like Elgrande) which
will offer consumers unbiased and extensive information on products they
are planning to purchase.

The Gartner Group has predicted that the highest growth potential in
e-commerce lies in boutique or specialty sites, which Elgrande is ideally
suited to service. Elgrande can take the lead in key niche markets such as
textbooks, professional and technical books, foreign language, alternative
music, etc.

More Like Yahoo Than Amazon
Elgrande has invented and established a group of technologies that is
collectively known as the Shop Engine. The Shop Engine is a group of
software programs that enables retail consumers on the World Wide Web to
purchase products directly from manufacturers without the necessity for a
retail storefront. The products are provided by third party manufacturers
or their primary fulfillment center, at or near wholesale pricing.

Elgrande shoppers will be able to keyword search according to subject,
author, manufacturer, ISBN, description, price, etc., or browse through
hierarchical directories logically grouped by subject (similar to Yahoo).
Elgrande also will provide consumers with a wealth of buying information
enabling them to make more informed purchases.

As an independent consumer information service that functions as a third
party aggregator of product information, Elgrande will provide a virtual
catalog of the world’s largest product information database.

Eliminating Bricks & Mortar and Inventory By only handling the data and not
the products themselves, the cost to Elgrande to list a product on its web
site is nominal. This will enable them to have the deepest catalog of
products across all sectors. No niche market will be too small for them to

Offering Limitless Virtual Shelf Space
Elgrande will list products available from many thousands of suppliers who
fulfill orders as they are placed at the Web site. Elgrande will provide
shoppers with unbiased product information, multimedia elements, delivery
options and charges, and the wholesale product prices received from
suppliers. For this service Elgrande charges a flat transaction fee of US
$1.50 per item, which will more than cover the costs of the transaction.

In the first phase of deployment, Elgrande will generate revenues through
the sale of literature, music and videos. These products are shipped to a
global clientele by the Company’s Phase 1 primary partner, Baker and Taylor
Inc. Shortly thereafter, the Company will add software and toys/games as
additional product categories. Elgrande will integrate new product
categories as agreements are made with major manufacturers and distributors
in each of the product categories.

Providing Free Access For Suppliers
Elgrande.com offers suppliers a free channel to e-commerce sales. There is
no charge for listing products on Elgrande. Elgrande.com provides
manufacturers the chance to create direct relationships with consumers of
their products. Suppliers have complete control over their product
information on site, including pricing and delivery options. They also
receive free demographic data related to their sales.

Growing Fast
Elgrande began selling books, music, and videos from their principle
supplier/partner, Baker and Taylor Inc, on June 2, 1999. This represents
the commencement of revenue streams for the Company, and sales are
increasing gradually, despite extremely modest advertising. This roll out
encompasses Elgrande’s Phase 1 plateau.

Elgrande’s Phase 2 rollout, scheduled for Fall, 1999, will see the
initiation of its Global Brand Strategy. A sleeker look and feel for the
web site will be introduced, as well as enhanced functionality for latest
version browsers and higher bandwidth users. At this time, the accumulated
product base of the independent publishers that have signed on will be
introduced, as well as the product categories of Toys/Games and Software.

To date, Elgrande has established partnering relationships with more than
375 suppliers in the publishing, music, video, software, and computer

International in Scope
Elgrande currently has offices in the United States and Japan, with the
main operations center in Vancouver, Canada.

Japan represents the second largest publishing market after the U.S.
Elgrande has set up a branch office in Tokyo to establish a marketing
campaign for Japan. Initial response from Japanese publishers, as evidenced
at the Tokyo International Book Fair this spring, was very positive since
Elgrande represents a new market at a time when old markets in Japan are