Types of E-market Pla ces
An electronic marketplace, also known as an E-marketplace, can be seen as a Website or a set of linked sites of common interest to specific types of participants.
In an E-marketplce, there are three parties, which are as follows:
• Third-party E-marketplace
• Consortia E-marketplace
• Private E marketplace
Third-party E-marketplaces:
Third-party E-marketplaces are independent Internet-based trading platforms. These are typically private marketplaces whose main function is to facilitate trade between buyers and sellers. The characteristics of a third- party E-marketplace are as follows:
• It represents a community of many buyers and sellers.
• It is used to establish a level where every seller is given equal importance. There is no monopoly criterion of selling products.
• It is a flexible idea of E-marketing. In third-party' E-marketplaces, a company can perform any business if it agrees on the terms and conditions. These are Internet-based brokers in the sense that the E-marketplace itself doesn't take physical possession of the goods and services being traded, rather it just facilitates their exchange by matching buyers and sellers.
Consortia E-marketplace:
A consortia E-marketplace is jointly formed by industry leaders. It enables a trading company to concentrate on the substantial portion of their industry trading volume. It provides extensive networks of suppliers including distributors and sellers.
The founding companies of a consortia E-marketplace are strong— that is why most of their suppliers and buyers join their network. Consortia E-marketplaces operate neutrally and independently from their owners since they are established as independent companies with an Independent CEO and an independent management board.
Consortia E-marketplaces are typically buyer-driven marketplaces, such as automotive, health care and aerospace industries. In this E-marketplace, buyers are consolidated into a few dominant manufacturers.
Private E-marketplaces:
Private E-marketplaces are set up by individual corporations to deal with their own suppliers and buyers.
Private E-marketplaces use password-protected extranet to do their business that extends a single company's supply chain to its trading partners.
But their technical infrastructure is almost the same as public E-marketplaces. Private E-marketplaces provide more capabilities such as joint planning and synchronized production processes.
Therefore, these E-marketplaces require a large back office system for their proper functioning. This is achieved by implementing an Enterprise Resource Planning( ERP) package in an industry.
This provides a better view for each trading partner by developing collaboration along the supply chain.
There are several reasons because of which large companies are more interested in establishing their own private E-marketplaces rather than joining a public one. The reasons are as follows:
• Private E-marketplaces offer greater data privacy and security as many companies consider their transaction activities to be a competitive secret.
• There are certain patterns and conditions on which a business can be started on the Internet. Private E-marketplaces are the only type of E-marketplaces that offer a possibility to transfer those patterns on-line and choose the method that suits the best.
• Both the public E-marketplaces, third-party and consortia marketplaces, depend on the fees collected from the users to finance their operations. Almost none of the public E-marketplaces are making money and most of them are still refining their systems to deliver value-added services to the customers. On the-other hand, private E-marketplaces are gaining good economic approach by selling their products.
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