IdyaFlow

B2B marketplaces are starting to generate a lot of interest. Companies like Ariba, Chemdex, Commerce One, FreeMarkets and Internet Capital Group have attained breathtaking stock market capitalizations. Venture capitalists are pouring money into more B2B marketplace start-ups. Even industrial stalwarts like General Motors and Ford have announced plans to set up their own marketplace platforms to bring their suppliers and buyers closer. As this is a new entrant with new business models in the B2B space, it’s increasingly difficult to make sense of the landscape. In this article, we introduce how the different types of B2B marketplace models work and how they create value, we hope to provide useful guidance not only to entrepreneurs looking to launch marketplaces but also to the many buyers and suppliers developing strategies for capitalizing on B2B marketplaces. Why B2B marketplaces?   ● Companies can streamline their processes and eliminate unnecessary costs by moving many of their...

New generation of B2B marketplaces is not “one size fits all.” Broadly speaking, new B2B marketplaces fall into one of two main categories — niche players and market leaders. The niche players are businesses that are focused on a particular niche market or community of users. The market leaders are businesses that already have a large customer base, brand presence and want to grow even bigger by offering more choices to their existing customers. By bringing together huge numbers of buyers and suppliers and by automating transactions, marketplace platforms expand the choices available to buyers, give suppliers access to new customers, and reduce transaction costs for all the parties. By extracting fees for the transactions occurring within the  B2B marketplaces , marketplace entrepreneurs can earn vast revenues. And because the marketplaces are made from software—not bricks and mortar—they can scale with minimal additional investment, promising even more attractive margins as their ...