The business side of e-marketplaces

By Julie Bort
Network World, 09/11/00

A portal has several meanings. It can be a site that lets businesses sell to one another, but whose value-added services, like chat, forums and articles, are its primary focus. This aptly characterizes Buzzsaw.com, for the construction industry. A portal could also refer to a site that leads to other sites. Get2connect.com meets this definition. Some use the word portal to refer to an extranet that is a company's internal purchasing site.

The words "e-marketplace" and "exchange" are often used interchangeably to mean a place where many-to-many transactions take place. There are lots of buyers and sellers and one may perhaps buy and sell at the same exchange. Formerly, an exchange referred to a site where bidding or auctions were the primary transaction, while an e-marketplace offered a wider range of purchase options. However, that differentiation is quickly dissolving. Within this genre are procurement-based sites, supplier-based sites, and independent sites that cater to both buyer and seller.

Exchanges stemmed from procurement-based sites, sometimes called buyer-hosted sites, so these are some of the longest-running business-to-business e-commerce sites around. The Automotive Network Exchange is a pre-eminent example. Often, these sites create and host their own content rather than using content hosted directly by each supplier.

Supplier-based or supplier-hosted sites, such as Foodscape.com and nearly all the maintenance, repair and operating equipment sites, are driven by the vendors. They let vendors control their own data, typically by linking out to the vendor's catalog. This gives such sites always-accurate product data. But, done poorly, are difficult to use for comparison shopping from a single screen. They also raise questions about who owns the customer.

Independent or neutral sites, such as Chemconnect.com, obviously cater to neither side, but try to support both. They can struggle with the same business problems: poor supplier management, customer-ownership questions and a lack of valuable premium services.

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