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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.

Nowshade Kabir is the founder, primary developer and present CEO of Rusbiz.com. He has Ph. D. degree in Information Technology. Dr. Kabir has over 12 years of experience in International Trade and has worked as an advisor to several government projects. You can contact him at mailto:nowshade[at]rusbiz.com, http://ezine.rusbiz.com, http://www.rusbiz.com