Here's an update and summary of the
recent Ad-Marketing discussions about Net Market Makers or B2B
e-Marketplaces. The contents of this report include the following
A. Events: What's
New or Planned?
- About Marketing
B. B2B e-Marketplace Info Sites;
Resource Guide is up!
C. Online Reports
D. Introduction to B2B e-Marketplaces
E. Summary of List Discussions:
- About Associations vs. B2B e-Marketplaces
What's New or Planned?
June 19, 6:00 to 9:00 pm - B2B "Community of
Interest" event hosted by CIT in Herndon, featuring a panel
discussion with WebMethods, Extricity, ObjectSpace, and
CommerceQuest.You are invited to attend an exciting networking
event for B2B professionals of the Virginia, Maryland, and
Washington DC region. These important B2B technology leaders will
present a spirited panel discussion about B2B e-Marketplaces and
B2B technology, solutions, and business strategy. Responding to
the boom in B2B Internet commerce, a new, grass roots organization
will be meeting for the third time at this event. For more
information and registration, please email: firstname.lastname@example.org.
e-Marketplace Info Sites, B2B e-Marketplace Resource Guide!
Mitch and I have put together an Ad-Marketing B2B
e-Marketplace Resource Guide. This guide is a work in progress.
Please send additions for the guide to Mitch at: email@example.com
Scroll down to the next section for definitions and an
introduction to B2B e-Marketplaces, or go directly to these
- Jupiter, probably the best & longest list of B2B
e-Marketplaces; subscription services
- collection of excellent reports; see Morgan Stanley DW, April
- comprehensive content site on B2B & B2B e-Marketplaces
- B2B e-Marketplace list
- vert/horiz/geog/value added service categorized B2B
- B2B news and resources
- B2B research center
- B2B e-Marketplace list, major sites
- B2B resources
- B2B e-Marketplace list
- B2B e-Marketplace list; registry for industry participants
Thanks George Gardner for pointing
b2business.net and netmarketbuilders.com!
There are several recent reports on this subject. Many of
these reports can be found on the NetMarketMakers.com
site. A couple of these reports are worth highlighting:
to B2B e-Marketplaces
Call them Net Market Makers (NMM) - Net Markets - B2B
Independent Trading Exchanges - B2B Infomediaries - B2B
Metamediaries: These are all different names for about the same
thing. A NMM or B2B e-Marketplace is neutral third party that
deploys the commerce infrastructure and creates the value
proposition to attract large numbers of buyers and sellers to the
marketplace, usually in a narrow vertical market. (others types
exist) Think of a farmer's market in your favorite town, or think
of the "marketplace" in the central plaza of a German
city in the 1600's - the marketplace takes on a vibrancy and life
[liquidity] because shoppers know they can go there and buy what
they need and producers know they can go there and find buyers for
what they produce [commerce]. Service providers go there to sell
shoe repair services, legal assistance, brokering, etc. [value
added services] The marketplace is a meeting place [community]
where people have fun talking with their neighbors and exchanging
useful or valuable information.
B2B e-Marketplaces are just that.
The marketplace host creates a marketplace with compelling value
propositions for B2B commerce, compelling value added services,
and a compelling community. Some add compelling, expensive content
to the mix. In this case a for-profit business invests in
technology and marketing to create the B2B e-Marketplace,
attracting large numbers of buyers and sellers. Unlike B2C sites
that are all about lower prices and delightful consumer shopping
experience, the B2B e-Marketplaces are all about creating true
business value for suppliers and buyers. Marketplace success or
liquidity is also dependent on the host providing efficient
commerce infrastructure for a more complicated
business-to-business procurement arena. The marketplace must
provide the tools and energy for a compelling community to emerge.
And clearly valuable, related services must be provided by
partnering service providers.
In December, '98, there were about
20 B2B e-Marketplaces. You've heard of www.Chemdex.com
, etc. But have you seen www.equalfooting.com
, www.floraplex.com ,
, www.altranet.com ,
...? There are 800+ B2B e-Marketplaces today. CSC Consulting
predicts there will be 10,000+ Net Marketplaces within a few
years. Gartner predicts that the value of the transactions for
physical goods flowing through them will be $2.6 Trillion in 2004.
eSteel has emerged as a "best practices" for some
analysts. Today eSteel, built by CSC, I believe to be the world
leader in building major B2B e-Marketplaces, has 1100 participants
in 63 countries. The eSteel annualized run rate exceeds $420
million. AMR Research ranks Altranet, the global energy exchange,
as number one across all verticals. Transactions through Altranet,
launched in '98, are now in the $Billions, having 6000 plus users
worldwide. B2B e-Marketplaces are categorized by many analysts in
a myriad of vertical industry focus, geographic region focus,
"horizontal" product (as in maintenance, repair and
operations (MRO) products, and value added service or business
Opinions vary widely over the future for
these marketplaces. When will consolidation occur? Can there
rationally be 10,000 marketplaces? When will high profile failures
occur? Will large corporate buyers create their own procurement
portals with their competitors, a la the automotive industry? The
B2B e-Marketplace links above will provide you with a wealth of
E. Summary of
- Summary of List Discussion About Marketing
Will B2B e-Marketplaces offer
group buying services, offering access to
volume discounts to small buyers, as a strategy for attracting and
retaining large numbers of buyers? Are any B2B e-Marketplaces
offering analytical CRM (Customer Relationship Management) to
suppliers as a strategy to differentiate and to attract &
Virtualmarkets.com, a startup that presented at
Venture One Premier a few weeks ago, plans to be an ASP
(applications service provider) offering virtual group buying
services to B2B e-Marketplaces. Their web-accessed software will
enable the marketplace host to offer anonymous aggregation of
small procurements for large volume discounts as a value added
One mature e-Marketplace has a strategy to
contract with certain e-commerce enabled suppliers to offer
discounts to member. The objective is to build value added service
for members, both to attract new buyers, and secondly to retain
Aggregation of small orders for volume discounts
will only work where the served vertical market has a great deal
of commonality of products purchased by the small buyers, and
large volumes of transactions. Where that occurs, the strategy
Many e-Marketplaces are racing to build a database
identifying the buying behaviors of the marketplace buyers.
Analytical CRM is essential to the success of the marketplace.
Attracting large numbers of buyers and compiling valuable
information about their behaviors is the critical strategy to
attract the critical mass of suppliers to the marketplace. The
marketplace must reach a critical mass of both buyers and
Community building by the e-Marketplace host is another
critical factor in the success of the e-Marketplace.
Communications amongst participants and information sharing are as
important, long term, as the commerce transaction technology.
Bulletin boards, chat rooms, other community building features,
and relevant published content add value and provide a means for
businesses to communicate their requirements and unmet needs.
e-Marketplaces have pursued a different strategy of first
contracting with the dominant distributor in their vertical, thus
locking in the critical mass of suppliers. www.buzzsaw.com has
pursued this strategy.
Data is very limited because most
e-Marketplaces are very young. It would be dangerous to make any
generalizations about B2B e-Marketplace strategies today.
Brock and Jim Kennedy contributed significant and extensive
insight in a series of posts.
- Summary of List
Discussion About Associations vs. B2B e-Marketplaces
Whose demise, NMMs or trade
association? If a strong trade association in the vertical targeted by a new NMM
launches its own e-Marketplace, who will win? Potential for partnering?
This question prompted some
spirited discussion from many people with extensive association experience.
A few pioneering industry trade
associations today are building a B2B e-Marketplace for their vertical
industry. Most, however, do not view this as their core competency and have
no plans to do so.
There are a large number of factors
that determine whether a given association could, should, or would
be a partner with a new NMM, compete with the NMM, or defer to the NMM.
Relative size and strength of the association, nature of the
membership - individuals vs. strictly corporate, American vs. global, market nature
of member companies, relative importance of lobbying efforts, technology
sophistication, etc., are some of them.
Some associations have an
outstanding lobbying organization and have to continually deal in the political
environment. It is not likely that these association will be challenged by a
new NMM, although there are examples of a NMM assuming a lobbying role.
In a vertical where the
associations are relatively weak, a new B2B e-Marketplace with strong community
and value added services could replace the associations for all but
lobbying purposes. A few industries, however, have very strong national trade
associations that have the industry power to attract the critical mass of
players to a B2B e-Marketplace should they launch one. This latter situation
seems to be ideal for a strategic alliance with a new e-Marketplace. Timing
and the perceived strength of the association are probably important
variables in the mix.
Associations strengths are their
identity or brand, their database of members, and intellectual capital.
Building a B2B e-Marketplace is far from their core competency. They
probably would under estimate the financial and human resource investment needed to
build the marketplace.
To net out the comments, opinions
seem to indicate that the new NMM should be very aware of the relevant
associations and attempt to exploit the strengths of that association
through strategic partnering. Some association will view the NMM as a threat.
The NMM that successfully builds
critical mass probably has nothing to worry about from the associations.
Tony Byrne insightfully points out
that the major publisher for the vertical industry is another important
player that the NMM should not ignore. Tony suggests that partnering with the
publishers and associations can dramatically reduce the NMM's
investment requirements for content and community.
Posts from Tony Byrne, Jonathan
Trenn, Mike Diegel, Andy Brock, Peter Kirsch, and Ross Stapleton-Gray
offered excellent insight.
Best regards to all, Bill
William G. Brickley
Senior Director, e-Business
Virginia's Center for Innovative
CIT Tower, Suite 600
2214 Rock Hill Road
Herndon, VA 20170-4200