Electronic Marketplace
The Electronic Marketplace encompasses every type of purchase, from an individual buying a book, new clothes or a holiday online, to a council or government tender for a new building or motorway. The electronic marketplace has revolutionised shopping and many high street retailers now have a transactional website, meaning that products can be purchased online as well as from bricks and mortar stores.
Business to Business (B2B) trade has also benefitted dramatically from the increasing popularity of the Electronic Marketplace. Using Electronic Procurement (eProcurement), the ordering process has also become much easier and quicker for buyers and suppliers. The benefits of the electronic marketplace and trading online are substantial. Increased efficiency, a reduction in the reliance on paper based ordering and administration for both buyers and suppliers. Suppliers often experience an increase in sales, and prompter payment.
Deciding to use the electronic marketplace for B2B trading is sensible and cost effective, for both buyers and suppliers. There are different types of electronic marketplace models, and finding the most appropriate one will depend on the industry, or the type of products bought or sold.
An Independent Electronic Marketplace is usually operated by a third-party, and allows businesses looking to buy goods or services to post their requests for quotations or bids. Suppliers can then provide potential buyers with the relevant information, goods and services electronically using an online catalogue and email. This method is instant, and so much quicker than sending catalogues and brochures out by post, and waiting for a purchase order to be received.
In a Buyer-Orientated Electronic Marketplace, a single company, or group of buyers will look to join forces in order to reduce costs and administration by obtaining the best price and support for similar goods and services. For suppliers, this presents an excellent opportunity to promote materials, goods and services to customers who are ready to buy.
A Seller-Orientated Electronic Marketplace offers suppliers the opportunity to advertise their goods and services to buyers. Buyers can find out more about suppliers, products and markets that they may not be familiar with, and choose the most appropriate supplier. Markets or locations that would traditionally be too far away or too expensive can be targeted by suppliers at no additional cost, thanks to the Electronic Marketplace. This provides sellers with a captive audience. This is also a good opportunity to promote special offers, seasonal or time-sensitive offers, and to reduce the amount of existing stock.
Vertical Electronic Marketplaces are designed for those companies trading in a particular industry, such as chemical production, or car manufacturing. It allows each level of the industry from the suppliers of raw materials to the distributors and retailers of the finished goods to have access to each and every level of the process. This provides greater collaboration and operating efficiency, which in turn reduces costs, time and administration, leading to more efficient and effective buying and supplying processes.
Horizontal Electronic Marketplaces connect buyers and sellers across different industries or location, and are used for buying items such as raw materials, consumable products like stationery or for Maintenance, Repair and Operations (MRO) goods and services. These types of products are vital to the running of the company regardless of the industry, or what the company produces.
No matter what goods or services your company produces, or what industry you are in, utilising the electronic marketplace will help reduce operating costs and improve efficiency. Whilst getting started in eProcurement may seem a daunting task, why not let ProcServce help you make the most of the Electronic Marketplace?
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