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4.2 B2B Marketing: Sell-Side E-Marketplaces 109

2. Discuss the following: spot buying versus strategic sourc- salers). The intermediaries may even be pure online compa-
ing, direct materials versus indirect materials, and vertical nies (e.g., Alibaba.com).
markets versus horizontal markets. We now turn our attention to the most common sell-side
3. What are company-centric marketplaces? Are they public method—selling online from a company’s e-catalog.
or private?
4. Define B2B exchanges.
5. Relate the supply chain to B2B transactions. Sales from Catalogs: Webstores
6. List the benefits and limitations of B2B.
Companies can use the Internet to sell directly from their
online catalog. A company might offer one catalog for all
customers or a customized catalog for each large customer
4.2 B2B MARKETING: SELL-SIDE (possibly both). For example, Staples (staples.com), an
E-MARKETPLACES office-supply vendor, offers its business customers a person-
alized software catalog of about 100,000 products at differ-
A major portion of B2B is selling in what is known as B2B ent pricing schemes (see their ordering site at order.
marketing. B2B marketing, which is also described in Online staplesadvantage.com).
File W4.1, refers to marketing by manufacturers and whole- Many companies use a multichannel marketing strategy
salers along the sell-side of the supply chain. A variety of where one channel is e-commerce.
methods exist. For information, see the periodic reports from In selling online to business buyers, manufacturers might
eMarketer, such as eMarketer (2016). encounter a similar problem to that of B2C sellers, namely
conflict with the regular distribution channels, including
corporate dealers (channel conflict). To avoid conflicts,
Sell-Side Models some companies advertise online, but sell only in physical
stores.
In the B2C model, a manufacturer or a retailer electronically
sells directly to consumers from a storefront (or webstore). Distributors’ Catalogs
In a B2B sell-side e-marketplace, a business sells products
and services to business customers electronically, frequently Webstores are used by manufacturers (e.g., Gregg’s Cycles)
over an extranet. The seller can be a raw material producer or by distributors. Distributors in B2B are similar to retailers
selling to manufacturers, or a manufacturer selling to an in B2C. They can be general (like W.W. Grainger, see Section
intermediary such as a wholesaler, a retailer, or an individual 4.2) or they can concentrate on one area, much like Toys “R”
business. Intel (intel.com), Exxon (exxon.com), Cisco Us (toysrus.com) in B2C.
Systems, Inc. (cisco.com), and Dell (dell.com) are examples
of such sellers. Alternatively, the seller can be a distributor Example: Stone Wheel
selling to retailers or businesses (e.g., W.W. Grainger, Inc.; Stone Wheel (stonewheel.com) distributes over 100,000 dif-
grainger.com). In either case, sell-side e-marketplaces ferent auto parts from 15 warehouses serving over 3500
involve one seller and many potential buyers. In this model, independent repair shops in the Midwest region of the
both individual consumers and business buyers might use USA. They deliver within 30 min, using their own vehicles.
either the same private sell-side marketplace (e.g., dell.com) Using the e-catalog, customers can order the exact part, sav-
or a public marketplace. ing time and minimizing misunderstandings and errors.
The one-to-many model has three major marketing meth-
ods: (1) selling from electronic catalogs with fixed prices; Self-Service Portals
(2) selling via forward auctions; and (3) one-to-one selling,
usually under a negotiated long-term contract. Such one-to- Portals are used for several purposes, one of which is to
one negotiation is familiar: The buying company negotiates enable business partners to conduct self-service, as is shown
the price, quantity, payments, delivery, and quality terms in the following example.
with the selling company. We describe the first method in
this section and the second method in Section 4.3. Example: Whirlpool B2B Trading Portal
For 33 case studies, see Petersen (2015). Whirlpool (whirlpool.com) is a large global manufacturer of
home appliances. The company needs to operate efficiently
B2B Sellers to survive in an extremely competitive market. It must col-
laborate with its business partners along the selling segments
Sellers in the sell-side marketplace may be click-and-mortar of the supply chain and provide them with outstanding cus-
manufacturers or intermediaries (e.g., distributors or whole- tomer support.