An Introduction to Business-to-Business Exchange

14 Pages Posted: 16 Jun 2009

See all articles by Paul Farris

Paul Farris

University of Virginia - Darden School of Business

Phillip E. Pfeifer

University of Virginia - Darden School of Business

Richard R. Johnson

University of Virginia - Darden School of Business

Abstract

While business-to-consumer e-commerce (B2C) has garnered the most public attention of any online business sector, business-to-business (B2B) e-commerce is proving to account for a much larger slice of the economic pie. A significant portion of B2B e-commerce transactions will occur through online marketplaces called B2B exchanges. The objective of this technical note is to provide an understanding of these exchanges, including their organizational and revenue models.

Excerpt

UVA-M-0638

an introduction to Business-to-Business Exchanges

Introduction

While business-to-consumer (or B2C) e-commerce has garnered the most public attention of any on-line business sector, business-to-business (or B2B) e-commerce is proving to account for a much larger slice of the economic pie. Goldman Sachs Investment Research estimated that the value of on-line B2B transactions in the United States would reach $ 1.5 trillion by the year 2004. Working with Goldman Sachs, B2B exchange experts, Arthur Sculley and William Woods, predicted that $ 600 billion of this total would pass through B2B exchanges by 2004. In comparison, Forrester Research projected that B2C on-line transactions would only reach $ 108 billion by 2003.

B2B exchanges are on-line marketplaces that bring together buyers and sellers. Sculley and Woods state that:

The unique feature of a B2B Exchange is that it brings multiple buyers and sellers together (in a “virtual” sense) in one central market space and enables them to buy and sell from each other at a dynamic price, which is determined in accordance with the rules of the exchange.,

. . .

Keywords: business-to-business marketing, bargaining/bidding, market structure, procurement, selling, strategic market planning, supplier relations, e-business

Suggested Citation

Farris, Paul and Pfeifer, Phillip E. and Johnson, Richard R., An Introduction to Business-to-Business Exchange. Darden Case No. UVA-M-0638. Available at SSRN: https://ssrn.com/abstract=1420576

Paul Farris (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-0524 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/farris.htm

Phillip E. Pfeifer

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4803 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/Pfeifer.htm

Richard R. Johnson

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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