Why Suppliers Should Use B2B Exchanges
Business to business e-commerce is on the rise! Worldwide B2B e-commerce revenues are estimated to reach around US$ 2 trillion in 2004. This is a significant leap from last year's US$ 1.4 trillion. However, according to a recent survey, although, more than 70% of companies have already used Internet as a purchasing channel, a mere ten percent of their overall spending is directed via the Internet! Contrary to popular believe, this means, B2B e-commerce has still large potential to grow.
Internet has the capacity of changing the conventional way of doing business. Today, you can not only buy and sell your products and services on the Internet, you can, virtually, shift all your business processes to online solutions as well. If you take advantages of new Internet based technologies, the outcome would be tremendously beneficial to your business. How to do this without spending a fortune and not putting a huge pressure on scarce corporate resources? The possible answer could be B2B exchanges!
A B2B exchange is an online marketplace, where buyers, sellers and intermediaries form communities, exchange views, offer products and services, and conduct business transactions.
By becoming a member of a B2B exchange you can benefit in both cost-saving and revenue increase - two primary requirements of productivity increase.
New sales channel
By becoming a member of a B2B exchange, you open a low cost, highly functional and easy-to-use sales channel for your company. You expose your company to a new targeted audience that otherwise would have been untapped. Prospective customers can buy products and services from you, using various venues and features of the B2B exchange, where you are a member.
Marketplace: All B2B exchanges include a marketplace, where suppliers can post sales offer of their products and services. Buyers, looking for specific products, can easily find best suppliers that suit them from the marketplace. A populated marketplace can easily become a good sales channel for a supplier.
Electronic catalog: As a member of the B2B exchange, you are allowed to add all your products or services to the consolidated online repository of the exchange. Adding your products to the repository helps to create online standardize electronic version of your product specification - if you don't have that before - and use the same catalog with other electronic sales systems - even with other B2B exchanges using XML interface.
You can publish sales offer of your entire catalog to the marketplace, eliminating a need for other web presence. You can add products or services to the repository one by one or you can use XML interface to upload your whole electronic catalog.
Web Store: Some B2B exchanges allow you to convert or integrate your website to their exchange. This helps you to handle sales conveniently from your website and the marketplace of the exchange seamlessly. You can make a web store from scratch with the help of integrated website builder of the B2B exchange as well.
Auctions: One of the great features of many B2B exchange is their auction systems. As we all know from the immense success of Ebay, auctioning is a great way of selling products online. Some exchanges boast reverse auction system, where suppliers bid for a deal posted by a buyer.
As a supplier, you can participate in those tenders without any extra cost involved.
Low customer acquisition cost
Your mere presence in the B2B exchange might bring you new customers! Since the buyers come to the exchange themselves; your cost of getting customers through this channel is relatively low in comparison to other traditional channels. You can even increase your visibility by advertising in the key places of the exchange, where your prospective buyers frequently visit. Being highly targeted, these ads produce incredible results.
Improve customer service
Ability to have constant interaction through the B2B exchange allows you to serve your customers better. You can track the whole ordering process from payment to delivery and bring greater efficiency in customer service. The integrated functions of an exchange such as sales management, internal messaging service, lead management, etc. also help you managing customers service process effectively.
Efficient information sharing method
When needed, you can instantly update your catalog and inform customers about changes. Whether you are launching a new product or having a web seminar, through the B2B exchange you can share the information more efficiently. Some B2B Exchanges use sophisticated knowledge management systems to create, capture, reprocess and reutilize information intended for specific group of audience. These contents or information can be displayed on demand or in time to a member - when needed.
Business processes management
One of the primary objectives of using B2B exchanges for you should be their ability to handle, run and administer various business processes. These solutions assist you to streamline your business, reduce overhead costs and reduce documentary errors.
Using technologies in a bid to streamline business processes like supply chain is nothing new. Companies have been using various solutions to support product development, customer service, procurement and other integral processes for many years. Before the Internet era, many companies have invested enormous amount of money in infrastructure building to automate supply chain process. Today, thanks to the Internet, even small companies have opportunity to use highly sophisticated supply chain solutions for a small cost. Many B2B exchanges, such as Rusbiz.com, allow small companies to use supply chain management solution for a small fee. The major benefits of using supply chain solutions include:
1. Reduced sales time
2. Better inventory control
3. Lower overhead
4. Reduced manufacturing cycle time
5. Reduced cost of goods
Business to business e-commerce is evolving very fast. The fact is, at one point, most of all business transactions will take place via the Internet. B2B exchanges are a way of building cost-effective e-business environment on the Internet, which is capable of producing concrete and quantifiable business benefits to the participants.
Nowshade Kabir is the founder, primary developer and present CEO of Rusbiz.com. A Ph. D. in Information Technology, he has wide experience in Business Consulting, International Trade and Web Marketing.