Transactions between two business entities or companies are generally referred to as business-to-business transactions.Commercial transactions generally happen either between two corporate entities or between a corporate and a retail customer or between two retail customers.
It might invovle commerce transactions between manufacturers and wholesalers or wholesalers and retailers or between two manufacturers.B2Bservices include the exchange of products, information or services between businesses.B2B sales constitute the major chunk of world trade. Exporters and importers around the world participate in the exchange of goods and services that drives a major share of the GDP to countries.The supply chain of all major industries will involve multiple transactions as companies need to purchase components and raw materials. An example of such scenario may be an textile manufacturer buying raw materials like dye from dye manufacturers.
In a supply chain, the transactions in the upstream are usually at business end while the tail of the supply chain usually involves B2C transactions. These transactions generally happen on a contractual basis for a certain amount of time and are of larger deal sizes.
Companies may be of two groups – horizontal (those that provide products/services across many industries) and vertical (those that provide products/services within an industry). The virtual marketplace is currently dominated by industry-sponsored marketplaces that thrive on low- cost internet platforms and capitalizes on the value proposition of collective bargaining and selling. All these business models can be either single firm-sponsored or collaborative marketplaces that aggregate demand and supply services. These models are moving away from the legacy systems that use EDI to more affordable and user-friendly online platforms.
With the advent of digital technologies, there are many online marketplaces and directories that help bring together buyers and sellers on internet-based platforms. The onlineplatform connects manufacturers, suppliers, exporters and importers. It allows sellers to create their own homepages to showcase products and services online, identify and collaborate with global buyers and reply to buy leads and sell offers.
“Virtual marketplace allow for greater visibility, affordability, real-time user experience and increases the reach of suppliers and manufacturers. Over the next few years, companies will try differentiating themselves through the integration of their online and offline business channels.”
This marketplace allows companies to utilize internet-based procurement and automation. It allows companies to select the best suppliers regardless of their geographical location and helps reduce the market inefficiencies in getting products and services from suppliers to buyers, helping in cost saving up to the tune of 65%. The live marketplaces are of much help to smaller manufacturers as it saves them costs and also allows them to reach out to a wide range of customers independently.