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Grow_your_business_using_B2B_Emarketplace_ _Part_I
| Grow your business using B2B Emarketplace - Part I.
If you are a small to medium size company and selling or
planning to sell products and services over the Net and still
did not try out emarketplaces, you are simply loosing a great
opportunity!
Research firm eMarketer predicts that worldwide B2B ecommerce
revenues will surpass US$ 1.4 trillion by the end of 2003. In
the United States alone revenues will total US$ 721 billion. By
2004, the US B2B ecommerce revenues are expected to reach US$
1.01 trillion and studies show that a significant portion of
these transactions will be conducted through emarketplaces.
What is an Emarketplace?
In a broader sense, business to business emarketplace is an
online platform where buyers and sellers come to communicate,
collaborate and make business transactions. Emarketplace caters
a large number of participant companies as a community. The main
objective of an emarketplace is to create a venue, filled with
features that allow members to efficiently conduct significant
portion of business processes on the Net. Emarketplaces are also
known as B2B exchanges.
Types of Emarketplaces
There are varieties of emarketplaces available on the Internet
to suit your company's specific need.
Public: These emarketplaces are open to all companies.
Virtually, anybody can become a member and conduct business
through these marketplaces.
Private: Membership is restricted and owners of the marketplace
decide according to which criteria they will select
participants. For example: a large trading company can have its
own emarketplace limited to its buyers or suppliers only.
Horizontal: If the emarketplace works with a large numbers of
products and services from different industries, it is called a
horizontal marketplace.
Vertical: Industry specific emarketplaces are called vertical
markets. An emarketplace, working solely with suppliers and
buyers of cars is an example of this kind of marketplace.
Can your company benefit from an Emarketplace?
Whether you are primarily a buyer or a supplier, participation
in emarketplace can generate enormous benefits to your company -
both in cost savings and productivity increase.
Benefits that you can have as a buyer
Automate the purchasing procedure Emarketplaces allow you to
send request for quotes to a prospective supplier, receive
quotes, send purchase orders and receive invoices within the
marketplace system. You can virtually consolidate all your
procurement processes in one single place. This process of
automation brings significant efficiency to you and saves your
transaction processing cost. According to Aberdeen Group, a
research company, thanks to B2B procurement systems, businesses
can reduce these processing costs up to 70%.
Comparison shopping at its best Since you can see all the
suppliers of a particular product, that you are planning to buy,
in one place, it is easy for you to see which one among the
suppliers suits you best in terms of quality, delivery time,
geographical location, costs etc.
Reduce sourcing time cycle Most emarketplaces allow you to
select multiple offers from different suppliers and create
purchase orders in one shot and send. Since you handle all your
procurement related correspondence from a consolidated working
page, you can see right away answers to requests for quote,
invoices, etc. This helps you react instantly and reduce you
time in document processing.
Community participation You can receive valuable feedbacks from
other fellow buyers, receive industry-related information, build
new partnerships and use the networking ability of a community.
Real time access to current product information Current
information of a product is vital for an accurate buying
decision. 24 hours access to supplier's catalog helps you
getting most up-to-date information any time you need it.
Control rogue spending Consolidated and automated procurement
and approval method stops maverick buying in a company.
Benefit that you can have as a seller
New sales channel By becoming a member of an emarketplace, you
open a low cost, highly functional and easy-to-use sales channel
for your company. You expose your company to a new targeted
audience that otherwise would have been untapped to you.
Low customer acquisition cost Your mere presence in the
emarketplace might bring you new customers. Since the buyers
come to emarketplace themselves your cost of getting customers
through this channel is relatively low in comparison to other
traditional channels.
Improve customer service Ability to have constant interaction
through the emarketplace allows you to serve your customers
better. You can track the whole ordering process from payment to
delivery and bring greater efficiency in customer service.
Efficient information sharing method When needed, you can
instantly update your catalog and inform your customers about
changes. Whether you are launching a new product or having a web
seminar, through emarketplace you can share the information more
efficiently.
Reduce supply chain cost According to eMarketer, automated
supply chain process through emarketplaces can reduce your
overhead costs 20% to 40%.
You may ask, if participation in an emarketplace is so
beneficial, why companies are not flocking to emarketplaces.
The slower adoption can be blamed on various inadvertent factors:
- Many companies had fall short to generate significant sales
from their own websites and look at emarketplaces with a dose of
skepticism. But as studies show ecommerce endeavors fail,
mainly, due to lack of proper planning and marketing, as many
site managers take the attitude that build-it-and- they-
will-come.
- Many conservative suppliers claim that their business depends
on close relationship with local buyers. In reality, you can
also get access to local untapped market through emarketplaces.
Another aspect - you can bring efficiency to your business by
co-adopting an emarketplace along with your buyers.
- Many elderly executives are not very tech-savvy and afraid of
adopting new technologies considering them too complex. In
reality, e-business is virtual implementation of real life
business processes and not very difficult to embrace.
- Fear of price shopping by buyers is another factor, why
suppliers are reluctant to use emarketplaces. The ability of
emarketplace to emphasize all characteristics of the product in
product content and demonstrate buyer-specific pricing should
eliminate this fear.
- Many, mistakenly, consider that participation cost in
emarketplace is very high and will hurt their bottom line. The
expenses related to emarketplace membership are, usually, a mere
fraction of what you can save from the use of its different
features.
What to look in an Emarketplace?
As an online venue, where participants expect to conduct
substantial part of their business processes, emarketplace has a
large range of useful features:
- Product catalog based on an industry-standard classification
system - Product search capability within the marketplace and
e-catalog - Buyers and sellers search capabilities - Supply
chain process, i.e. request for quote, quotation, purchase
order, billing system, etc. - Directory of members - Shipment
tracking - Simple system of adding and editing products - Simple
offer posting system - Ability to promote products with special
offers, sales, and discount
Apart from these, some emarketplaces boast other interesting
features like auction and reverse auction, new product listing
notification, business forum, XML interface, Internal messaging
system. Naturally, implementation of these features may vary
significantly emarketplace to emarketplace.
Where to look for Emarketplace?
The best place to find an extensive list of emarketplaces is the
B2B directory site: http://www.bocat.com.
The open directory project DMOZ has a good list of
emarketplaces. However, not all listings in both of these places
are, in reality, emarketplaces. Some of them are simple trade
boards. This list is located at
http://dmoz.org/Business/E-Commerce/Marketplaces/
Yahoo! directory is not organized well enough to locate
emarketplaces. They are scattered under the subcategories:
Vertical marketplace builders, Trade directories and even Trade.
Forbes magazine has a quality list of many B2B companies
including some emarketplaces. You will find the list at:
http://www.forbes.com/bow/b2b/main.jhtml
To be continued in next issue: Selecting the right Emarketplace.
About the author:
Nowshade Kabir is the founder, primary developer and present CEO
of Rusbiz.com. A Ph. D. in Information Technology, he has wide
experience in Business Consulting, International Trade and Web
Marketing. Rusbiz is a Global B2B Emarketplace with solutions to
start and run online business. You can contact him at
mailto:nowshade@rusbiz.com, http://ezine.rusbiz.com,
http://www.rusbiz.com
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