Grow your business using B2B emarketplace – Part II

Selecting the right emarketplace

Although, IT spending has been staying flat for the last several
years, corporate spending in e-business is gaining significant
ground and at present surpasses 20 percent of overall IT budget.

This means, more and more businesses are undertaking ecommerce
initiatives, and as a result increasing sales, streamlining
business processes and dramatically boosting productivity.

Most experts agree that average business, which is slow in
adopting e-business applications, risks loosing its competitive
edge to their more progressive rivals.

Emarketplaces provide with a great opportunity for small to
medium size companies to test online business for a minimal risk.
This is due to the factor that the e-business applications that
come along with an emarketplace membership package are
prohibitively expensive to develop in-house by most companies,
and require large professional workforce to operate. As an
example: product content development with required attributes,
suitable for e-business, itself might feel like a daunting task
for most offline companies.

So, as a company, what should be your first step in starting
e-business through emarketplaces?

Naturally, out of hundreds of emarketplaces available today,
you have to find one that matches all your requirements.
Choosing right kind of emarketplace

In best case scenario, if yours is a large enough company,
you should build your private emarketplace with all the
necessary features specific to your business. The potential
of having your own emarketplace is amazing!

- Ecommerce will add value to your existing business
transactions
- Your present suppliers will be able to post most updated
information on their products via e-catalog and their
storefront
- You can build community from your present buyers and
supplier, or invite members on the Internet
- Real time marketplace will allow you to take quick buying
and selling decision
- Both buyers and sellers can contact you through Instant
Messaging System
- Your entire supply chain process can be managed from one
place
- You can issue real time purchase tenders with either
limited access only to your community members or open to
public
- Sell your stock lots through online auction
- Brand you emarketplace and establish your company as a serious
online player within your Industry

However, as I mentioned earlier, if you are not a very big company,
you will probably be better off with a membership in an established
emarketplace.

If you are a manufacturer, wholesaler or a buyer of certain
industry specific products or services, your best choice would be
a vertical emarketplace that caters specially your industry. For
example: if you buy or sell fish, you should look for an emarketplace
that deals with this product only. Another thing that you should
keep in mind is how geographically limited your business is. If you
buy and sell fish within the locality of your state or region, if
available, get an emarketplace that works in your region.

Totally different story, if you carry large number of products
from different industries; for you a horizontal marketplace that
cater a range of industries is a better choice. If you are an
international trader involved in import or export, you should select
a global emarketplace, which has members from the countries you
deal with.
Features that are must

A good emarketplace amasses various features in order to facilitate
smooth transactions of business deals. However, there are some key
attributes that are absolutely necessary for any emarketplace to
become successful; and as a prospective member you should look for
these features and characteristics while choosing an emarketplace
for yourself.

Product catalog based on an industry-standard classification system
While it might not look so important from the surface; to have
accurate, well-defined and timely-updated product content is
extremely crucial for any online business. Since you have to
integrate your product catalog to the aggregated electronic catalog
of the emarketplace, which could be a very complex task, you should
make sure that the classification system that they have is widely
used online; and if necessary you can use same product content with
other emarketplaces or e-procurement applications.

The best option, as I believe, is based on The Universal Standard
Products and Services Classification (UNSPSC), which is a global
coding system that classifies products and services. This
categorization scheme covers the broadest collection of industries
and commodities available today, and designed to facilitate
e-commerce transactions by providing geography-independent common
nomenclature system.

Product search capability within the marketplace and e-catalog
Members of the emarketplace should be able to locate any product
or service, whether in the auctions, marketplaces, or in the catalog
with ease. Advanced search function should allow finding required
items using precise query.

Supply chain process, i.e. request for quote, quotation, purchase
order, billing system, etc.
Efficient supply chain management is the number one strategic priority
for many businesses. In 2001, Cisco System alone had to write off
US $2.5 billion in excess inventories due to poor management of its
numerous outsourcing contractors.
E-marketplaces can help streamlining your supply chain process if
the required features are embedded in their system.

Directory of members
Usually most emarketplaces incorporate a searchable directory of
their members. The members get an added opportunity of creating
new business relations and increasing sales thanks to this feature.

Product content adding and editing interface
In order to make product content adding and maintaining easier
for sellers, the marketplace must have an uncomplicated tool.
The tool could be a wizard-based combination of simple forms.
To integrate larger catalogs speedily and efficiently the
emarketplace should have XML based interface.

Ability to promote products and services
The process of posting an offer for sale of a product or a service
on the marketplace should be simple and easy but sophisticated
enough to create dynamic offer, offer with time limit, variable
pricing based on quantity, etc.

Apart from the above mentioned functionalities that facilitate
conducting e-business, other key characteristics of a quality
e-marketplace should include:

Simplicity – An emarketplace should be easy to learn and use.
Large Community – The quantity of members should be big enough,
so that new participants can expand their business.
Flexibility – Emarketplace functions should be flexible enough
to modify or add with new features when necessary.
Neutrality – The emarketplace should be an unbiased venue for
both sellers and buyers. No member should have any privilege
at the expense of others. Providing an open and transparent
market for all the participants is an important constituent
of the value proposition of an emarketplace.

Cost of doing business through e-marketplace

In general, thanks to the large member base, e-marketplaces
charge a reasonable subscription fee if you would like to
participate in it. Many emarketplaces also charge a nominal
fee for each trade made using their facilities. Other costs
involved, that you should consider, are internal workforce
needed to handle business via emarketplace, catalog
integration and maintaining, etc. In any case, the cost of
doing business through emarketplaces is negligible for most
businesses compare to the gains they make.

Get your partners involved

If you just build a corporate website and don’t spend
required time and money to promote, it won’t bring any
business. Same goes for emarketplace! Mere participation in
an emarketplace also will not produce any significant
benefit if you don’t convince your existing buyers and
suppliers to work with you through your chosen emarketplace.