Page 139 - Introduction to Electronic Commerce and Social Commerce

4.7 B2B Exchanges (E-Marketplaces): Definitions and Concepts 119

Figure 4.8 The group-
purchasing process
$

2
1 3
The SME specifies
Small what is needed— The buyers
businesses signs office supplies, long- name the price
up for the free distance telephone they are willing
service. service, etc. to pay.

5
For each item, the
6 aggregator either
negotiates with 4
In addition, the suppliers or uses an
suppliers pay a e-reverse auction, The aggregator
negotiated hoping to meet groups all
commission to or beat the requests by
the aggregator. requested price. category and price.

little success in finding an exact match on its own. Therefore, SECTION 4.6 REVIEW QUESTIONS
companies usually ask an intermediary to help.
A bartering intermediary can use a manual search-and- 1. Describe a buyer-operated procurement marketplace and
match approach or it can create an electronic bartering list its benefits.
exchange. With a bartering exchange, a company submits 2. Describe the benefits of desktop purchasing.
its surplus to the exchange and receives points of credit, 3. Discuss the relationship of desktop purchasing with group
which the company can then use to buy items that it needs. purchasing.
Popular bartering items are office spaces, idle facilities and 4. Explain the logic of group purchasing and how it is
labor, products, and even banner ads. For examples of barter- organized.
ing companies, see U-Exchange (u-exchange.com) and Itex 5. How does B2B bartering work?
(itex.com). 6. What are the major considerations for selecting an
e- procurement vendor and solution?

Selecting an Appropriate E-Procurement
Solution 4.7 B2B EXCHANGES (E-MARKETPLACES):
DEFINITIONS AND CONCEPTS
Having many procurement methods, consultants, and soft-
ware makes the selection of the right method(s) difficult. The term B2B exchange, or simply exchange, implies the
Ariba, Inc. (ariba.com) provides an innovative score sheet existence of a marketplace with many potential buyers and
that companies use to evaluate vendors based on the described many potential sellers. In addition to being online trading
success factors. The success factors are grouped by cost venues, many exchanges provide support services such as
reduction, increased agility, managing complete commerce, payments and logistics software and consulting services.
and fulfilling tactical requirements. They also act as industry portals.
When organizations make such decisions, these decisions Exchanges are known by a variety of names: e- marketplaces,
may be influenced by factors such as: Who is buying? What trading exchanges, trading communities, exchange hubs,
are you buying? How much information do you need to make Internet exchanges, Net marketplaces, and B2B portals. We
the decisions? What is the reputation of the vendor(s)? What will use the term exchange in this book to describe the
testimonials are available? general many-to-many e-marketplaces, but we will use some