- 2 - B2B Marketplaces: Establishing the right stuff Oliver Slesar, Jun 2000 © 2001 Sixhills Consulting Ltd & Author KSFs described above: marketplace neutrality vs. existing market power and knowledge. Broadly, four marketplace forms are appearing: 1. Direct sellers marketplace: Industries with very large and powerful suppliers will find the largest players (e.g., Cisco.com) are able to set-up very successful direct sales channels that become leading marketplaces due to their market power. Neutrality is less of an issue since it is clear they, as leading suppliers, are the focal point of their marketplace, although they may also offer complementary products from other suppliers to further reinforce their site as a one-stop shopping destination. 2. Independent intermediary hubs: More fragmented markets will typically be targeted by start-ups that focus on creating a neutral intermediary able to provide an unbiased hub linking many buyers and sellers (e.g., Chemdex.com). Larger direct sellers will likely have difficulty establishing themselves as intermediaries due to their lack of neutrality, resulting in difficulty to sign up direct competitors as users, who would be reluctant to provide confidential pricing info, share T-tax with them, etc. 3. Oligopoly cooperative hubs: In industries with many large players, an accelerating trend is for them to cooperate and establish a group intermediary (e.g., FXAll.com- a foreign exchange hub from leading banks, B2Build.com – a construction portal from leading builders in Spain). Owning the hub together helps to skirt the neutrality issue (though it is doubtful that large players not included will want to join). It also pours significant transaction volume / market power into the intermediary from day one. Working together effectively will be a key issue for these B2B marketplaces. 4. Metamarkets: In industries where many B2B hubs are already in place, these start-up sites will be able to scan and consolidate marketplace information across many hubs into one view. For example, in B2C, the proliferation of auction sites has lead to metamarkets such as Auctionwatch.com, which allows users to see auctions across eBay, Amazon auctions, etc. Clearly, this type of hub adds value to users that might otherwise need to check several hubs, and it could diminish the relative importance of any one hub before it has a chance to become dominant. Control of data is a key issue here: eBay has already sued to prevent accessing and redisplaying their information. New B2B marketplace entrants will select the form best suited to them. Once they do so, additional key strategic decisions
< Page 1 | Page 3 >