Page 141 - Introduction to Electronic Commerce and Social Commerce

4.7 B2B Exchanges (E-Marketplaces): Definitions and Concepts 121

• Providing escrow services ICE is linked electronically to all its customers (mem-
• Arranging for group (volume) purchasing and other bers). Trading is global and is done 24/7. Currently, ICE is
discounts organized into three business lines:
• Defining terms and other transaction values, including
negotiation • ICE Markets. Futures, options, and OTC markets. Energy
• Inputting searchable information, including industry futures are traded via ICE Futures Europe; soft commodity
news futures/options are handled by ICE Futures U.S.
• “Grant[ing] exchange access to users and identify[ing] • ICE Services. Electronic trade confirmations and education.
company users eligible to use exchange • ICE Data. Electronic delivery of market data, including
• Collecting transaction fees and providing the neces- real-time trades, historical prices, and daily indices.
sary software and its integration with buyers and/or
sellers systems, including EDI, XML, etc. ICE offers market participants a range of trading and risk
• Providing analysis and statistics of products’ management services globally:
transactions
• Registering and qualifying buyers and suppliers” 1. Benchmark futures contracts
2. Risk management via a global central counterparty clear-
The types of services provided by an exchange depend on inghouse
the nature of the exchange. For example, the services pro- 3. Integrated access to global derivatives markets
vided by a stock exchange are completely different from 4. Leading electronic trading platform
those provided by a steel or food exchange or by an intellec- 5. Transparency and regulation
tual property or patent exchange. However, most exchanges 6. Independence governance
provide the services illustrated above. Note that, some B2B
exchanges may have individuals as either sellers or buyers, Intercontinental Exchange owns several pioneering
in addition to corporations. An example is localdirt.com, an exchanges such as ChemConnect.
online marketplace that connects thousands of farmers with
many buyers, promoting efficient trading of local produce. Example 2: The Receivables Exchange
The Receivables Exchange is a website where businesses
seeking financing can sell their receivables to those who are
Ownership of B2B Exchanges willing to loan them money. (The receivables are used as col-
lateral for the loans.) The process involves auctions and is
Exchanges, portals, and directories are usually owned by a managed by The Receivables Exchange, LLC. (recx.com).
third-party operator. Both sellers and buyers prefer such an A demo is available on the site.
arrangement. Alternatively, exchanges may be owned by a For a list of exchanges all over the world, see internet-
few very large sellers or buyers. This kind of arrangement is worldstats.com/links2.htm.
referred to as a consortium.
Example 3: SolarExchange.com
Third-Party Independent Exchanges SolarExchange.com is a global solar marketplace facilitating
B2B online auctions for solar-related materials and finished
Third-party exchanges are electronic intermediaries. The goods. This exchange is a global community where suppliers
intermediary not only presents catalogs, but also tries to collaborate with buyers from anywhere in the world.
match buyers and sellers and encourages them to make trans- According to the company, their service portfolio “spans
actions by providing electronic trading tools and rooms. the solar supply chain, delivering procurement management,
risk management, online auctions, price indexes, human
Example 1: Intercontinental Exchange Group (ICE) resource sourcing and a knowledge base serving the solar
The Intercontinental Exchange (theice.com) is an Internet- industry.”
based global network of B2B exchanges (23 regulated The major benefits, according to the company, are:
exchanges and 6 central clearing houses [2014 data]) that
operates marketplaces that trade commodities contracts and • “Connect with the global solar trading community
over-the- counter (OTC) energy and commodity features as • Reduce costs by automating solar procurement and sale
well as related financial products. While the company’s origi- activities
nal focus was energy products, recent acquisitions have • React rapidly to changing market conditions for greater
expanded its activity into “soft” commodities (grains, sugar, competitive advantage
cotton, and coffee), foreign exchange, and equity index fea- • Extend your market reach through access to new trading
tures. For details, see intercontinentalexchange.com/about. partners and suppliers