Skip to main content

Characteristics of B2B EC

  1. Parties to the Transaction: B2B commerce can be conducted directly between a buyer and a seller or it can be conducted via an online intermediary. The intermediary is an online third party that brokers the transaction between the buyer and seller; it may be a virtual intermediary or a click-and-mortar intermediary. 
  2. Types of Transactions: B2B transactions are of two basic types: 
    1. Spot Buying: It refers to the purchasing of goods and services as they are needed, usually at prevailing market prices, which are determined dynamically by supply and demand. The buyers and the sellers may not even know each other. Stock exchanges and commodity exchanges (oil. sugar, com, etc.) are examples of spot buying. Spot buying may be conducted most economically on the public exchanges. 
    2. Strategic (Systematic) Sourcing: This involves purchases based on long-term contracts. Strategic purchases can be supported more effectively and efficiently through direct buyer-seller online negotiations, which can be done in private exchanges or private trading rooms in pub- lic exchanges.
  3. Types of Materials Traded: Two types of materials and supplies are traded in B2B:
    1. Direct Materials: These materials are materials used in making the products, such as steel in a car or paper in a book. The characteristics of direct materials are that their use is scheduled and planned for. They are usually not shelf items, and they are frequently purchased in large quantities after extensive negotiation and contracting. 
    2. Indirect Materials: These are items, such as office supplies or light bulbs that support production. They are usually used in Maintenance, Repair, and Operation (MRO) activities. Collectively, they are known as non-production materials. 
  4. Direction of Trade: B2B marketplaces may be classified as vertical or horizontal. 
    1. Vertical Marketplaces: They deal with one industry or industry segment. For example, marketplaces specialising in electronics, cars, steel, or chemicals. 
    2. Horizontal Marketplaces: These marketplaces concentrate on a service or a product that is used in all types of industries. For example, office supplies, PCs, or travel services.
Previous Next

Labels:

Comments

Post a Comment

Popular Post

Advantages of EDI

1) Shortened Ordering Time : Paper orders have to be printed, enveloped and sent out by the customer's post room, passed through the postal service, received by the supplier's post room and input to the supplier's order pocessing system. To achieve all this, reliably, in under three days would be to do very well. EDI orders are sent straight into the network and the only delay is how often the supplier retrieves messages from the system. Orders can be in the supplier's system within a day, or if there is urgency, the messages can be retrieved more frequently, for example every hour.  2) Cost Cutting : The use of EDI can cut costs. These include the costs of stationery and postage but these will probably be fully matched by the costs of running the EDI service. The principle saving from the use of the EDI is the potential to save staff costs. For example, if the orders are directly input to the system there is no need for an order entry clerk.  3) Elimination of Errors :...
Post a Comment
Read more

Infrastructure for EC

Introduction The e-commerce infrastructure is defined here as the supporting capabilities for online trading between multiple companies which include hardware, software, networks, online payment technologies, security and encryption technologies, online trading business models, legal and regulatory framework, and managerial and organisation capabilities.  Infrastructure is the shared human, informational , and technical resources on which the work system relies in order to operate, even though these resources exist and are managed outside of the work system.  To evaluate the interdisciplinary aspects of construction e-commerce infrastructure, one proposes using a four pillar approach. Figure 5.1 illustrates the skeleton for the proposed integrated construction e-commerce infrastructure. The proposed integrated e-business infrastructure can be broken down into the following four groups of components:  1) Technological Infrastructure : Technology infrastructure is a work...
1 comment
Read more

Business Strategy - E-Commerce Strategy Inputs

E-Commerce Strategy Inputs Traditionally an IT strategy would be subservient to the business strategy. For e- commerce the IT strategy becomes a central component (or the determinant factor) in business strategy.  Inputs to an e-commerce business strategy are: Technology An E-commerce technology includes:  EDI : Streamline supply logistics and facilitate decreases in trade cycle times.  Electronic Markets : Re-define the operation of a market sector.  Internet E-Commerce : Provides new direct sales opportunities and novel business to business and business to consumer applications.  Internet e-commerce can be used to improve, transform and re-define business value:  Organisation  Source of Business value  i) Improve it a) Product promotion b)New direct sales channel c)Direct saving d)Time to market e)Customer service f)Brand image  ii)Transform it a)Technological and organizational learning b)Customer relations  iii)Re-define it a)New pro...
Post a Comment
Read more