Business to business transactions are different from the consumer concept of e-commerce in fundamental ways. Purchasing and selling processes are usually more complicated but using the technology minimises the transaction costs through fewer phone calls, fewer errors and a faster flow of information between supplier and buyer.
The main trading functions on B2B portals are:
- Supplier directories and search engines – to help buyers find new suppliers and sellers to get leads
- Tendering services – a place to announce calls for a tender to a large number of potential suppliers
- Classifieds – to help buyers and sellers trade specific products
- Auctions
Relevance
There are a range of issues to be considered before getting involved in e-Markets including determining how they would apply to your business. E-Markets can be used for buying and selling different types of goods and services and for marketing and research.
Using e-Markets has both pros and cons. They allow you to reach more customers and new opportunities for relatively little cost and can improve efficiency by streamlining business processes.
However, they can be less effective for very complex or technical products and services and they present challenges if you have different pricing structures in different geographical markets. It also takes time to receive a return on your investment and using an e-Market to sell directly to end customers can cause issues with existing partners or suppliers.
Research what your competitors are doing with respect to e-Markets before deciding whether to go ahead.
Readiness
Consider the following issues before deciding if you are ready for an e-Market:
Readiness for change – one of the biggest hurdles can be apprehension among staff about new technologies and systems
Coping with growth – determine whether your business can support an additional sales channel
Selection
Issues you should take into consideration when selecting a marketplace include:
Ownership, history and longevity – look for a marketplace that is professional, financially secure and structurally stable
Liquidity – research registered members and transaction statistics to gauge how likely you are to win business through various e-Markets
Cost – weigh up the fee structure against the amount of business you are likely to win
Trading tools – research the range of trading tools. Some e-Markets offer a wide range and others have just one or two
Control of user access – look for systems that ensure legitimate businesses will be using the e-Market
Security and ethics – assess the level of security provided and operational procedures that will ensure independence and integrity
Risks of non-payment or sub-standard product delivery – research how the marketplace will help manage your trading risks
Logistics support – find out if the e-Market will help you fulfil the distribution side of a transaction
Interoperability – look for a marketplace that can communicate with a variety of software applications
Training and Support – look for online demo tours and face-to-face or telephone support
