Selling formats

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Selling formats

• Multi-vendor catalog
• aggregates product information from multiple
  vendors into a single site
• well-defined products with little price
  volatility
• used when the cost of negotiating individual
  transactions is higher than the potential cost
  savings
• buyers benefit

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Selling formats

• Auctions and reverse auctions
• Suited for unique products whose value is
  unknown. Example products perishable goods
  (seafood, computer products), discontinued or
  excess goods, one-of-kind items (large industrial
  product, pollution rights, patent)
• Initiators benefit

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Selling formats

• Exchanges
• Both buyers and sellers make bids an and offers
  on the same underlying commodity
• Both buyers and sellers can reference current
  market prices
• More flexible than auction format
• Works well for commodity or well-defined products

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Levels of anonymity

• Fully anonymous transactions
• Fully named transactions
• Partially anonymous transactions

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Critical success factors

• Domain expertise
• Unique aggregator of information
• Neutrality
• First/fast mover advantage

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The current buying process

• Sourcing
• Ordering
• Fulfillment
• Replenishment

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Inefficiencies in the current buying process

• Inefficient transactions
• Inefficient trading partner search processes
• Inefficient product information search processes
  - pricing, comparison, availability, order
  status, other product-related services
• Inefficient supply chains
• There are often multiple inefficiencies,
  particularly in international trade.

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Intermediary to metamediary

• An intermediary offers a multi-product,
  multi-vendor marketplace
• A metamediary adds proprietary, value-added
  services

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Metamediary services

• Buying guides
• Bill of materials function
• Procurement management function
• Credit verification
• These (and other) valued added services can be
  developed in-house, or provided by third-party
  partners

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Examples of industries and metamediaries

• Energy - separate marketplaces for supply,
  storage and delivery, also fragmented within
  those markets natural gas exchanges,
  electricity exchanges
• Computing and electronics - finished product
  manufacturers like Cisco and Dell leave little
  room for metamediary look to component
  manufacturers