An Exploding Marketplace

The world has become a busy place, with trillions of dollars changing hands each year in business transactions and consumer spending. While the customary method of doing business in person or via telephone is still in use, the growing trend is to conduct ecommerce transactions on-line, with the use of computers.

On-line revenues from ecommerce in the U.S. alone have grown from 24.1 billion in 2000, to over 100 billion in 2005. And, the number of on-line users in the U.S. has exploded from 124.7 million in 2000 to over 200 million.

Canada’s combined private and public online sales have also experienced a boom. Up almost 40% in 2003 from a 27% jump in 2002; public sector enterprises realized nearly $511.4 million in sales.

Along with the skyrocketing use of the virtual marketplace comes the need for special tools, such as ecommerce web hosting, ecommerce software, and the ecommerce shopping cart.

How Does it All Work?

Ecommerce web hosting provides a business web site with special tools for doing business over the internet. Features such as extended data storage and monthly data transfer capacities, security certificates, and complex data bases are required to make a business web site run smoothly.

Higher data capacities allow for the sheer size of a business site, and the enormous exchange of information involved. Security certificates make the site safe for monetary transactions, and databases such as SQL keep track of individual accounts, purchases, inventory, or any transaction.

The ecommerce shopping cart allows the customer to select items and then purchase them at a virtual check out stand, usually with several payment method options, such as credit cards and PayPal.

Businesses require skilled personnel to implement and monitor these special tools for marketing goods or services on-line. There are many ecommerce web hosting firms that meet these and other special needs for a successful ecommerce solution.

Acecomp.com offers experienced ecommerce web site design and hosting, and ecommerce solutions for any type ecommerce web site. Visit them on-line at www.acecomp.com

Max Sheppard is Co-Owner of Acecomp Plus at http://www.acecomp.com Customer Website Design, Website Development, E-Commerce and Content Management Solutions to maximize our clients online potential.

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Businesses, which are still sitting on sidelines and not doing business on the Internet, should think seriously about their position! If you are one of them, chances are there, that you have to pay dearly for your indecision as you might lose significant market share to your more proactive competitors in a very short period of time.

Apart from the fact that e-commerce is growing at the rate of more than 25 percent a year, the use of online features can bring efficiency to virtually every aspect of business process, be it supply chain management or customer support management.

But, how can you build an e-commerce business and take advantages of all these great possibilities? After all, you are pretty sure that anything to do with new technology is complicated, time-consuming, and expensive.

Believe it or not, this is just a misconception that most business owners have about the Internet technology. The truth is - in order to run a business online and reap profits, like any new effort, you need to do a little homework, have patience and determination, and get going.

Take the following steps seriously and in no time you will be able to embrace fascinating world of online business.

Take your products online

Getting your product online does not simply mean - having a nice picture and a product narration to go with it. Effective use of the Internet is based on standards. Standards, as you know, are created to facilitate common use of a technology. If you ever imported or exported a product or service, or if you registered your product with some kind of authorities ever; you certainly know that each product falls under certain subcategory according to the classification system that you encountered. Internet is the same thing. Since the emergence of Internet, several classification systems have been developed.

If you think long term and would like to use same catalog with multiple e-marketplaces, you should adopt one of the prevailing classification system in the Internet. The best online catalog classification available from my point of view is UNSPSC. For one thing, many prominent e-marketplaces adopted this particular system, which allows you to post your products on multiple e-procurement systems and e-marketplaces.

How do you do this? I would suggest you to become a member of one of the e-marketplaces, where you can aggregate your products using some kind of simple wizards or forms. E-marketplaces based on Commerce One’s the largest B2B e-marketplace enabler, have this facility.

Our own Rusbiz e-catalog system, which is also based on UNSPSC, also allows you to integrate your products using a very simple but sophisticated form. If you do not have time to do it by your own, you can use the service of a B2B exchange. Rusbiz also provides with similar service.

Get an online presence

What should be your next step once you have all your products transformed into e-catalog? Naturally, you need to have an online presence to sell the products. There are number of options how to do this.

Become a member of an e-marketplace

This could be a large geography oriented fairly large horizontal market or a vertical e-marketplace specific to your industry. The membership fees are in most of the cases not so expensive. But many of them charge some percentage on your transactions, usually, from 1 to 3 percent. If you expect big sales volume, you may think this might not be the best choice for you. However, if you get new customers, thanks to your mere presence in an e-marketplace, the percentage that you have to pay on the transaction you should consider as customer acquiring cost. Under any circumstances, it is good to become a member of at least one e-marketplace as you -automatically get exposed to thousands of new prospective customers.

Build a website

There are several ways you can construct an e-commerce site to your need.

You can build a website in house by employing developers or you can hire a web development company to do this for you. The advantage is you can have a website with the look, feel and functionality according to your given specification.

However, both of these methods could be way costly for a small business. Average cost of building an e-commerce website runs starting from US$ 600 plus hosting and maintenance charges for a miniscule site with limited features to several hundred thousand US Dollars for a powerful e-commerce website.

Another option that you have as a small business is to build an e-commerce site from prefabricated templates. While this is affordable and easy, you considerably lose flexibility and customization possibilities in comparison to building a site from scratch.

Build a web store

All these above mentioned cases do not allow you to have the potentials and advantages that come with an e-business website integrated with a B2B exchange. Which means, whether you are a business to consumer company with occasional sales to businesses or you are a pure play B2B company, a Web Store merged into an e-marketplace is what you need.

A web store from a B2B exchange gives you the best of both worlds. You are having a professional e-commerce site which incorporates all the features that an e-marketplace has to offer. And you build a site from simple and easy to edit templates.

For a detailed information about the features that come with a web store and benefits that you can get from them, follow this link: Powerful E-business Store

About The Author

Nowshade Kabir, Ph.D., is the founder, primary developer and present CEO, of Rusbiz.com, a global business to business e-commerce portal with feature like storefronts, aggregated catalog, e-marketplace, trade leads, internal messaging system supply chain solutions, etc. With a doctorate in Information Technology, Dr. Kabir has worked an advisor to government projects and has over 12 years experience in International Trade. An author of many B2B and business related articles; he publishes a bi-weekly E-zine for online business community. You can subscribe to his newsletter free of charge from http://www.rusbiz.com.

nowshade@rusbiz.com

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What is an E-marketplace anyway?

E-marketplace is a business to business web based venue, where buyers and sellers meet online, generate business leads and conduct business transactions. The e-marketplace features are tailored in a manner so that a large numbers of buyers and suppliers can be serviced as a community. A participant of an E-marketplace can be a buyer, a seller or both. Unlike an E-distribution portal which is oriented to assist suppliers selling their products or an E-procurement system which is focused on buyers solely, an E-marketplace is a platform which caters buyers and sellers equally. As a participant of an E-marketplace you are able to explore buying and selling opportunities, make sales offers and buy products and services, add products and services to aggregated e-catalog and use numerous other value added features.

E-marketplaces are tremendously beneficial to all businesses that decide to participate in them. However, the potential benefits that a company can accrue from an E-marketplace are directly proportional to the factor how heavily the company uses the offered features of that E-marketplace. Naturally, a company that makes e-marketplace as its primary sales channel and integrates its sales resources to supply chain solutions of the E-marketplace avail more in sales and administrative overhead cost savings, reduced paper work, better customer service, reduced product distribution costs and online sales growth than a seasonal user of the e-marketplace.

A committed participant of an E-marketplace can benefit from and improve two primary factors of company productivity: Revenue Growth and Cost Savings.

Revenue Growth

Expand Customer Base

A seller, once registered with an E-marketplace, gets immediate access to a large community of prospective buyers of his products or services.

Revenue Increase from Existing Clients

Existing clients get faster and easier access to product information, quicker response to their requests, get better customer support and buy products online.

Revenue Increase from Value Added Services

Once an E-marketplace is set as primary sales channel, freed resources can be used to create more value added services for clients. Some of the services that the E-marketplace offers also can be utilized to generate more value.

Cost Savings

Order Processing Cost

The supply chain solutions of E-marketplace allow sellers to reduce order processing cost significantly. Studies show that cost of processing a purchase order can be reduced from US$ 70 down to US$ 6 only.

Sales and support costs

By automating sales and customer support processes companies can reduce over head costs over 25-30% easily.

Inventory keeping costs

Clearer visibility and forecasting ability allow companies considerably reduce inventory keeping costs.

Most executives agree that primary reason why they feel that the companies should participate in E-marketplace is its ability to streamline supply chain mechanism. Many inherent inefficiencies of supply chain process can be eliminated thanks to integrated to e-marketplaces supply chain solutions.

What sellers have to do in order to participate in E-marketplaces and reap numerous benefits that it can provide?

As most of the administrative and operational tasks are done automatically by the e-marketplaces, participation in them is not a difficult process.

These are the basic steps that a seller must take to participate in an E-marketplace:

Register

Registration might be an easy job of filling up a form. It is much better to take some initial preparations before doing this.

Choose a good login name: your login can be used by the E-marketplace to give you subdomain name, i.e. login.e-marketplace_name.com.

Profile: A well-written profile increases company image.

Logo: your logo helps you brand your company.

Add your products or services to E-catalog

Most E-marketplaces furnish with easy to use forms or wizards for sellers to add their products to E-catalog. As the product and service classification used in the E-catalogs often is an industry standard, it is important to spend some times to find the perfect subcategories for your products or services. If you have any doubt contact the customer support of the E-marketplace. Fill up as many given fields are there for a product as you can. The more information buyer gets right away the faster his buying decision would be.

Create offers

Most sophisticated E-marketplaces have various sales platforms apart from the E-catalog inclusion. Make general sales offers, time sensitive offers (hot offers - with offer expiry dates) and auction offers of your products and services. Determine the terms and methods of price, payment and shipment.

Decide how you will handle portions of the supply chain that you have to do offline.

Although, most of the supply chain process can be done online, not all e-marketplace offer a complete end to end solution. You also have to figure out what part of your back office can be integrated to the E-marketplace.

About The Author

Nowshade Kabir, Ph.D., is the founder, primary developer and present CEO, of Rusbiz.com, a global business to business e-commerce portal with feature like storefronts, aggregated catalog, e-marketplace, trade leads, internal messaging system supply chain solutions, etc. With a doctorate in Information Technology, Dr. Kabir has worked an advisor to government projects and has over 12 years experience in International Trade. An author of many B2B and business related articles; he publishes a bi-weekly E-zine for online business community. You can subscribe to his newsletter free of charge from http://www.rusbiz.com.

nowshade@rusbiz.com

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