Essentials of E-commerce
E-commerce business strategies
Major B2B models
Major B2B Models
1. Net Marketplace
a. E-distributor
b. E-procurement
c. Exchange
d. Industry Consortium
2. Private Industrial Network
Major B2B Models
Laudon & Traver
Page 82
Major B2B Models
Net Marketplace
E-Distributor
Major B2B Models
Net Market Place – E-Distributor
• E-distributor is a company that supplies products and services
directly to individual businesses.
• It is a case of one company serving multiple customers.
• The more products and services a company makes available, the
more attractive it is to potential customers.
• One-stop shopping is always preferred by customers.
• Top Indian E-Distributors are IndiaMart, MilMila.com,
TradeIndia, g04WorldBusiness, Shopclues, JimTrade, Tradeford,
Infibeam, ExportersIndia, Helping India, WebdealIndia, Eleb2b,
Trade Key India, Amazon Business, Alibaba, etc.
Major B2B Models
Net Market Place – E-Distributor
Major B2B Models
Net Market Place – E-Distributor
Major B2B Models
Net Marketplace
E-Procurement
Major B2B Models
Net Market Place – E-Procurement
• Just as e-distributors provide products to other companies, e-
procurement firms create and sell access to digital markets.
• They develop software that helps large firms organize their
procurement process by creating mini digital markets for a
single firm.
• They create custom-integrated online catalogs (where supplier
firms can list their offerings) for purchasing firms.
• On the sell side, they help vendors sell to large purchasers by
providing software to handle catalog creation, shipping,
insurance, and finance.
Major B2B Models
Net Market Place – E-Procurement
• The buy and sell side software is referred to generically as
“value chain management” software.
• The value chain management software consists of a
sophisticated set of sourcing and supply chain management
tools that permit firms to reduce supply chain costs.
• These cloud based software are referred to as Software as a
Service (SaaS) or Platform as a Service (PaaS).
• They make revenue through transaction fees, fees based on the
number of workstations using the service, or annual licensing
fees.
Major B2B Models
Net Market Place – E-Procurement
Examples of Indian E-Procurement sites:
• eprocure.gov.in
• tataprojects.com/offerings/procurement
• wipro.com/en-IN/business-process/-sourcing-and-
procurement---/
• procuretiger.com/pt/
• eproc.karnataka.gov.in/
Major B2B Models
Net Market Place – E-Procurement
Major B2B Models
Net Market Place – E-Procurement
Major B2B Models
Net Marketplace
Exchanges
Major B2B Models
Net Market Place – Exchanges
• An exchange is an independent digital marketplace where
hundreds of suppliers meet a smaller number of very large
commercial purchasers.
• Exchanges are owned by independent, usually entrepreneurial
startup firms whose business is making a market.
• They generate revenue by charging a commission or fee based
on the size of the transactions conducted among trading parties.
• They usually serve a single vertical industry such as steel,
polymers, or aluminum, etc.
Major B2B Models
Net Market Place – Exchanges
• For buyers, B2B exchanges make it possible to gather
information, check out suppliers, collect prices, and keep up to
date on the latest happenings all in one place.
• Sellers benefit from expanded access to buyers.
• The greater the number of sellers and buyers, the lower the
sales cost and the higher the chances of making a sale.
• Exchanges help to lower product cost, inventory carrying cost
and transaction costs.
• The ease, speed, and volume of transactions on these
exchanges are referred to as market liquidity.
Major B2B Models
Net Market Place – Exchanges
• A challenge faced by exchanges is to convince thousands of
suppliers to move into singular digital markets where they face
powerful price competition.
• Another equally tough challenge is to convince businesses to
change their purchasing behavior away from trusted long-term
trading partners.
Major B2B Models
Net Market Place – Exchanges
Examples of Indian Exchanges:
• Surat Diamond Bourse - suratdiamondbourse.in
• National Spot Exchange Limited (NSEL)
nationalspotexchange.com
• National Commodity and Derivatives Exchange (NCDEX)
ncdex.com
• Indian Energy Exchange Limited (IEX)
Iexindia.com
Major B2B Models
Net Market Place – Exchanges
Major B2B Models
Net Market Place – Exchanges
Major B2B Models
Net Marketplace
Industry Consortia
Major B2B Models
Net Market Place – Industry Consortia
• Industry consortia are industry-owned vertical marketplaces
that serve specific industries, such as the automobile,
aerospace, chemical, floral, logging, etc.
• They are more successful than independent exchanges in part
because they are sponsored by powerful industry players and
also because they strengthen traditional purchasing behavior.
• Examples include Biotech Consortium India Limited (BCIL), The
National Small Industries Corporation, Small Farmers’ Agri-
Business Consortium (SFAC), New Space India Limited (NSIL),
etc.
Major B2B Models
Net Market Place – Industry Consortia
Major B2B Models
Net Market Place – Industry Consortia
Major B2B Models
Net Market Place – Industry Consortia
Major B2B Models
Private Industrial Networks
Major B2B Models
Private Industrial Networks
• A private industrial network (private trading exchange, PTX) is a
digital network designed to coordinate the flow of
communications among firms engaged in business together.
• The network is owned by a single large purchasing firm and
typically evolves out of a firm’s own enterprise resource
planning (ERP) system.
• Participation is by invitation only to trusted long-term suppliers
of direct inputs.
• The network is an effort to include key suppliers in the firm’s
own business decision making.
Major B2B Models
Private Industrial Networks
Major B2B Models
Private Industrial Networks
Benefits:
• Closer relationships between buyers and suppliers.
• Increased supply chain visibility to all interested parties.
• Improved communication, demand forecasting and conflict
resolution.
• Risk reduction with financial derivatives.
• Futures market employed to prevent supply and demand
imbalances.
Major B2B Models
Private Industrial Networks
Top companies with their own private industrial network include:
• Walmart
• Coca-Cola
• P&G
• IBM
• Cisco Systems
• General Electric
• Nike
• Microsoft
• Dell
