Major Models of B2B e-Commerce

The three major B2B e-commerce models are determined by seller, buyer, or intermediary (third party) who controls the marketplace. Consequently, the following four marketplaces have been created. Each model has specific characteristics and is suitable for a specific business:

Seller-controlled marketplace: This is t he most popular type of B2B model for both consumers and businesses. In this model the sellers who provide to fragmented markets such as chemicals, electronics, and auto components come together to generate a common trading place for the buyers. While the sellers aggregate their market power, it simplifies the buyers search for alternative sources. Businesses and some time consumers use the seller's product catalog to order products and services online. 

Buyer-controlled marketplace: This model is used by large companies with significant buying power or a consortium of several large companies. The consortium among Ford, General Motors and Daimler Chrysler is a good example of this model. In this model a buyer or a group of buyers opens an electronic marketplace and invites sellers to bid on the announced products or RFQs (request for quotation). Using this model the buyers are looking to efficiently manage the procurement process, lower administrative cost, and exercise uniform pricing. Companies are making investments in a buyer controlled marketplace with the goal of establishing new sales channels that increase market presence and lower the cost of each sale. 

Third-party exchanges marketplace: A third-party-controlled marketplace model is controlled by a third party not by sellers or buyers. A third-party controlled marketplace model offers suppliers a direct channel of communication to buyers through online storefronts. The interactive procedures within the marketplace contain features like product catalogs, request for information (RFI), rebates and promotions, broker contacts, and product sample requests. The marketplace makes revenue from the fees generated by matching buyers and sellers. These marketplaces are usually active either in a vertical or horizontal market.

Trading partner agreements: The main objectives of the trading partner agreements B2B e-commerce model are to automate the processes for negotiating and enforcing contracts between participating businesses. This relatively new model is gaining popularity. This model is expected to become more common as extensible markup language (XML) and the ebusiness XML initiative (ebXML) become more accepted. This worldwide project is attempting to standardize the exchange of e-business data via XML, including electronic contracts and trading partner agreements. Using this model enables customers to submit electronic documents that previously required hard-copy signatures via the Internet. As soon as act passed by the Turkish government that gives digital signatures the same legal validity as handwritten signatures, this model will also be very popular in Turkey too. 

The main advantage of XML (extensible markup language) over hypertext markup language (HTML) is that it can assign data type definitions to all the data included in a page. This allows the Internet browser to select only the data requested in any given search, leading to ease of data transfer and readability because only the suitable data are transferred. This may be particularly useful in m-commerce (mobile commerce); XML loads only needed data to the browser, resulting in more efficient and effective searches. This would significantly lower traffic on the Internet and speed up delay times during peak hours. XML-based B2B trading partner agreements configurations can be business contracts, shipping logistics, inventory status or purchase order for example.


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