Selecting the right emarketplace
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
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
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
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