Online E-Marketplaces

copyright David L. Blenkhorn

2006

What are they?

An E-marketplace is a website where
buyers and sellers come together to
communicate, share ideas, advertise, bid
in auctions, and co-ordinate and fulfill
inventory

copyright David L. Blenkhorn

2006

E-Marketplace Types
Buyer-Driven

Supplier-Driven
Supplier

Buyer

Supplier

Buyer

Buyer

Supplier
Supplier

Buyer

Supplier

Buyer

Third-Party-Driven
Buyer

Supplier

Buyer

Supplier

Buyer
Buyer
Source: Legg Mason

Third
Party

Supplier
Supplier

Classifying E-marketplaces
Vertical Marketplaces

Horizontal
Marketplaces

deal with a single industry; e.g.,

metals, chemicals, energy,
autos, etc. VerticalNet,
Chemconnect, Covisint
cut across industries & deal
with a certain function; e.g.,
marketing, human resources,
finance, etc. Ariba Network,
Commerce Ones
MarketSite.net

Buy-side Marketplaces gathers a large number of

buyers onto a site to drive price
down; e.g., K-Marts Retail Link,
Freemarkets.com, Covisint

Classifying E-marketplaces
Sell-side Marketplaces purpose to gather multiple
sellers onto online catalogue
and information centres; ability
to group purchases as a
package; e.g., Grainger.com,
GE Global Exchange, DoveBid,
E2Open.com
Neutral Marketplaces true open markets, favoring
neither buyer nor seller; thirdparty brokers deal between
buyer & seller; e.g., Altra,
PaperExchange, Arbinet
copyright David L. Blenkhorn
2006

E-Marketplace Models
Online Catalogue Model

Auction Model

accumulation of a number
of companies catalogues
on one website; e.g.,
SciQuest, Ariba,
PurchasePro
purchase and sale carried
out in bidding fashion;
surplus inventory, used
capital equipment,
refurbished items, etc. e.g.,
Freemarkets.com,
TradeOut.com

E-Marketplace Models
Market Exchanges Model

Community Market Model

deals with specific

commodity market, e.g.,
natural gas, electricity,
communications
bandwidth, etc., numerous
buyers & sellers involved;
e.g., Altra, Enermetrix,
Arbinet
buyers & sellers from a
specific industry gather
online,whose websites
feature industry-specific
content, such as relevant
news articles, editorials,
market information, job
postings, message boards

Private vs. Public

Marketplaces
Private Marketplaces

Public Marketplaces

usually operated by large

firms such as Wal-Mart; its
SupplierLink has 10,000
suppliers online;
advantages: better volume
pricing, instant inventory
checks, online customer
service; Covisint is another
example
owned by a third party, not
involved in buying
goods/services

copyright David L. Blenkhorn

2006

E-Marketplaces Why Have So

Many Failed?

Unrealistic expectations
User resistance
Lack of value-added provided
Ineffective marketing

copyright David L. Blenkhorn

2006

E-Marketplaces Key Success

Factors
Value-added services
Supplier enablement (enhance
opportunities for suppliers)
Liquidity
Tailoring services to customers needs
Strategic alliances
Effective marketing and customer
relationship management (CRM)
copyright David L. Blenkhorn
2006