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 termsof 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.

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[at]rusbiz.com, http://ezine.rusbiz.com, http://www.rusbiz.com

RELATED ARTICLES Mr and Mrs Smith Go Online, as Internet Technology Moves from Fantasy to Normality According to NOP World, 48% of all Internet users have researched or purchased financial products such as insurance and loans on the internet, or used online banking facilities. In April, NOP World had already recorded estimates of 28 million people online in Great Britain, with 13. Retirement Signature Frames - The Perfect Retirement Gift! When most people think of a retirement gift, they think of a watch. It's the tried and true gift that companies give employees to say thanks for all the years of hard work. Evaluating Vendors of Ecommerce Fulfillment Services Once your website has secured an order, you have to fulfill it. While the fulfillment of digital goods is usually handled online, the delivery of physical goods is handled in a "brick-and-mortar" world. Why Our Site Was Removed From The ODP Our website, Best Of The Home, has been listed in the Open Directory Project for over a year. Recently, I conducted a search of the ODP for my site, to update it, and found that it was no longer listed in any category. Online Customer Service - The Cornerstone of a Successful Online Business Online customer service is still one of the most frequently overlooked aspects of running a successful online business. Yet, in the highly competitive world of Internet business, it could be (and should be) the one thing that sets you apart from your competition!Most Internet businesses that have a drive to succeed focus all of their time and resources on building a great site, and then trying to drive tons of traffic to that site. How To Prevent Your 3rd Party Merchant Account From Suspension What would you do if you were sent an email from your online credit card processor telling you that your account has been suspended or frozen?How are you going to pay the bills in the meantime?It is extremely important for you to familiarize yourself with the terms of your contract with your credit card processor.As long as you comply with their set regulation and guidelines to maintain your account in good standing you should have no problems. Bringing the World to Your Door According to Internet.com, by the year 2008 nearly 30% of offline purchases will be influenced by online research. Increasing E-commerce Website Sales With consumers purchasing billions of dollars of merchandise online each and every year, the Internet has become the key to financial security. The e-commerce business has consistently thrived well above all other online enterprises, and continues to flourish. eCommerce Software Solutions All of the long, grueling nights and an unknown number of working weekends spent converting your dream into reality finally paid off-in a big way! Affiliates are signing up every single day and the clicks have really turned into cash. Your success is not limited to a lonely website but several and all of them are helping you move very diverse product lines. Something new in e-commerce: the Echo System Build How four partners build and manage an exclusive art posters web site by emulating the way the echo works.Imagine a top-notch photographer, some demanding visitors and an e-commerce site that wants to make money. The Internet and Customer Care: Aid or Anarchy? It was reported in 'Marketing' magazine this month, that Britain is becoming a "disaffected nation", with each adult apparently making an average of 12 complaints to service providers each year, based on a "Service in Britain" survey by ASR (Andrew Smith Research). In response to the rise of the 'assertive consumer', brands are endeavouring to make sure 'good customer service' is a recognisable characteristic in the form of testimonials, efficient call centre responses and empowering staff throughout the company to resolve problems. Selling Globally Through a B2B Exchange Participation in B2B Exchanges is increasingly becoming one of the fastest growing marketing methods for businesses looking foraugmenting their client base beyond their local markets. Any good B2B Exchange offers direct contact with thousands of prospective buyers in a single location. The Top 10 E-Commerce Ways to Follow up with Clients - Part 1 Did you know that 80% of all sales are made after the 5th contact? The biggest mistake we make is not following up with our clients regularly. We not only lose the chance to offer other services and products, we lose the chance for satisfied clients' referrals. Expand Your Local Business Through the Internet To obtain more local customers for your business, consider expanding your local business through the Internet. Here are some ways of doing so. 7 Key Steps To Reduce Refunds and Chargebacks One sure-fire way to loosing out big time on your business profits is from incidences of excessive refunds and chargeback requests. If the number is high in any period you could risk loosing your third party merchant account altogether. 10 Compelling Benefits of Having A 3rd Party Merchant Account � If you have been wrestling with the idea of applying for your own 3rd party merchant account then take a look at the following compelling benefits of using a 3rd party provider to mange all of your credit card processing needs.1. Online Credit Card Processing - How to Accept Credit Cards - Ecommerce 101 Back in 1998 (through 2000 or so), I worked for a small company (called PaymentNet / then Signio) that handled online transactions. Verisign later purchased this company, and the product team I led integrated the "client" - the portion that took the credit card information and sent it to our servers for processing. Rules for Achieving Online Success The Internet brought a great deal of benefits to our life. Access to a lot of free and useful information is, probably, one of the most important out of them. Working With Drop Shippers Drop Shippers, the manufacturers or distributors who are willing to ship their products to your customers, bring a powerful benefit to ecommerce. Online businesses that engage in the wholesale-retail trade can cut down on all the hassles of shipping their products by simply establishing business relationships with drop shippers, and using them as part of their business model. Merchant Accounts: What They Can Do For You Congratulations! You created an impulse in a customer to buy your product. One small catch? without some way to take their credit card number, your sale is as good as gone.