Business to business exchanges
B2B exchanges radically reduce buyer’s costs as well as allowing the sellers to reach out to new and existing customers. Buyers and sellers are henceforth interconnected by exchanges and these exchanges acts as a source and media for instantaneous information in an enterprise as well as to the consumers of goods and services.
Development of B2B exchanges main advantage is that there is a reduction of prices due to open market conditions. There is also a reduction in costs of transactions due to use of internet while conducting transactions. The growth of internet therefore, has led to development of B2B exchanges.
Third party or Neutral B2b Exchanges:
They are electronic market places that buyers and sellers do meet. Buyers get a lower price due to open bidding and sellers understands better the movements of the market. The buying firms are envisioned to provision from a variety of relational or transactional and domestic or global sources. Some of B2B exchanges are specific to industries and some of them, marketplaces for a variety of industries business. An example is Verticalnet which is repositioning itself to be a leading supply chain solution provider through the internet. Information provided through industry-specific exchanges included technical manuals to the industry, job placement and training information.
These exchanges were established by buying consortia. They provided buyers an advantage over sellers in that the buyers became the focal point in these buying networks. ...