Marketplaces demystified:

Marketplaces are basically in essence where competitors come together in collaborative trading exchanges in both B2C and B2B models. An example of this can be easily recognized as the on-line mall so prevalent today within the B2C scheme where customers enter a shopping directory with competitors grouped and organized together.

In the B2B scheme, suppliers and buyers of all sizes can come together and trade. These marketplaces could be publicly or privately accessible restricting buyers and sellers through specially arranged relationships.

Marketplaces hold several key benefits for the supplier, buyer and market-maker. The benefits are as such:

Benefits to Suppliers:

• Enhance revenues with a high-volume sales channel
• Reduce sales costs by reaching fragmented buyers with greater efficiency
• Improve supply chain planning with visibility into purchasing group formation
• Improve manufacturing line efficiency by standardizing orders
  

Benefits to Buyers:

• Reduce product costs by leveraging greater purchasing power
• Reduce transaction, shipping and accounting costs by consolidating transactions
• Reduce maintenance costs by standardizing purchases

Benefits to Market-makers:

• Enhance participation among buyers and suppliers
• Generate liquidity by creating incentives to transact online
• Optimize the performance of installed marketplace systems
• Gain a competitive edge with next-generation marketplace functionality

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