Nothing Special

The Internet has blow up into the world of opportunities and chances for the business entrepreneur. The Internet has brought us quicker communication with and allows us to access into specific market places we want. Through the use of email, putting resources of business at our reach (because today, it is now in our finger tips) and giving us a broad basis of knowledge and education, the Internet has created a very productive atmosphere for ecommerce and small business. The development of high speed internet connectivity and millions of individuals as well as businesses online engaging in online commerce all over the world at any given moment has opened the doors to reach customers everywhere. At the present, we can now see customers purchasing stock online, purchasing shoes online, purchasing prescription drugs online and many more. The Internet today is truly the hottest trend in doing business entrepreneur. The changing of strategy of modern business is progressively becoming more and more reliant upon online transactions. In the present day, doing business to business ecommerce (also called b2b ecommerce) has turn out to be a key feature for the marketing sales or strategy in many companies doing online commerce planning. It is widely believed to promise a radical change in the way that firms trade with one another. Business to business ecommerce applications are being promoted as tools that will enable producer firms in developing countries to reduce their cost substantially, thereby easing their access to global market. Gaining knowledge about this great potential market place is very significant for the ecommerce business as a technique to increase Internet sales.

Business to business ecommerce involves two or more merchants doing business with one another on the Internet. These merchants need to be online as businesses to be considered as doing business to business ecommerce. In our time, these merchants are doing and using the World Wide Web in they’re business to spread out and increase. The Internet provides an open global network and access to this network is relatively cheap. Internet based business to business e commerce help producers obtain better information on global markets and give them direct access to new customers.

There are many marketing benefits and advantages when doing business to business ecommerce. In doing a business, these are the following common activities: Finding customers through sales and marketing; Obtain quotations, negotiate price, specifications and contracts; R&D. Product (or service) development; Sell to retail and wholesale customers and through distributors; Inventory control including disposal of distressed inventory and demand intelligence; Qualifying customers to prevent rogue transactions; Procurement of raw materials, components and supplies; Optimizing business through negotiations with suppliers, distributors and customers; Manage IT Resources; Invoicing; Strategic planning; Project management; Managing finance, cash, debt and investments; Manage Human Resources (Staff); Manage Property; Manufacturing or performing services; and Warehousing.

Today that transactions are done online, so I have research some of the negotiations online to understand and appreciate how the Internet technologies enable the organization to obtain competitive advantages through this kind of ecommerce. Here are the following:

• Initiated through requests or offers; Buyers want something, sellers have something to offer
• Sellers respond to buyers by offering products or services at a suggested price
• Buyers respond to sellers by offering a price for specific products or services
• Buying and selling can be via open or secret processes and may be for a fixed time
• Specifications can be negotiated instead of or as well as price

There are also many features of business to business marketplace portals and these are the following: Registration of suppliers (or buyers in a demand marketplace); Suppliers offer products or services; Suppliers provide additional details to allow buyers to select (qualify) potential suppliers; Portal may provide additional checks to enable further qualification of its suppliers: credit, references, research; Portal offers mechanism for searching suppliers; May include public or secret forms of offer (bids, prices, estimates); Marketplace may hold deposits or payment on behalf of the buyer (escrow) until the seller releases goods or meets a delivery milestone; May support contractual elements of transactions providing audit trail for purchase orders and invoicing; May aggregate demand from multiple buyers; Relationships may be short term or the basis for on-going trade; Portals may charge fees to buyers or suppliers or a percentage of contracts negotiated; and Marketplaces may be created independently or within existing industry relationships.

Aside from the list that I have mention above, there are also ways in generating new ways in communication channels for on going relationships and these are the following: ordering; invoicing; shared planning, product development and problem solving; reducing errors in communication; enabling just in time, JIT, ordering or shipping and moving warehousing costs to your suppliers; enabling distributors and customers to your marketing for you; and making it harder for your competitors to work with your suppliers.




The following are some of it:

1. It reduces costs – ordering and searching for raw materials online significantly reduces the costs of purchasing them. Many businesses prefer the “virtual” world that offers online sales of parts and materials. According to them, a company using the Internet sellers that supply this parts or supplies function can reduce the cost to one third.

2. It improves the marketing and sale of parts, materials, or products – doing ‘window shopping’ for parts, materials or resale products becomes tremendously easy so many buyers for companies and online merchants are on the Internet. You can get and compare the information about prices, features, delivery procedures and other useful information easily so you can guarantee that you have and get the best on what you need at the lowest possible price by means of internet commerce.
3. High efficiency – today, orders costing millions or even billions can be performed at the click of a button by the use of an Internet commerce software program in a matter of seconds which is formerly done over months.

4. No inventory worries – since the transactions are given online and goes directly to an e commerce server, all the needed information of having some verification of the needed material or product and its transportation is clearly traceable. Today, easy delivery proof is very easy because of the Internet e commerce functionality.

5. Supplying business to business e commerce is a great way to help businesses save money, effort and time. It is very ideal for those companies that are very demanding in deadlines.

6. Maximize company profit and reduce turnover time greatly.

7. Outsourcing the unprofitable parts of your business.

8. Speeding up your product development activities – reducing time to market

9. Improved business and market intelligence. Understanding your market better than your competitors.

10. Cloning your business in further market – according to many studies and researches, there are many successful establishments and companies doing traditional businesses experiencing difficulties in translating their reputation to the virtual podium the web offers.

11. Improving the speed of communication – as mention above, the Internet has provided a cheaper and faster way of communication in both the merchants and the potential customers.

12. Facilitating communication between your customers and suppliers – with the aid of the Internet, both parties (may it be situated in different part of the globe) can communicate and exchange though and concerns in real time.

13. Reducing wastage through additional sales channels – the waste can be reduce because in virtual world, you can have unlimited customers viewing your web site which possibly means more sales.

14. Improved ability to experiment and learn – you can test and study every customer visiting your web site. Example placing security logo in different areas of the page was discovered to affect the sales. Many examiners believed that testing is the key to success. They said that without it, you can’t be certain what impact the alterations you make have on conversion.

15. Higher customer retention rates.

16. Lower customer acquisition costs.

17. Reduced cost can be passed on in favorable pricing.

According to different studies and research conducted about this new e commerce application, they found out that e commerce opens new and cheaper access to global markets for producer firms. It strengthens the existing relationships between the manufacturers and global bargain hunters. It also reinforces existing power relations.

Though there are many benefits in doing businesses in the virtual world, we cannot deny the fact that it has also negative effects like in one study conducted which resulted that the developing country producers aren’t benefiting the business to business e commerce. According to them “..the use of the Web was being limited by inadequate and costly domestic telecommunication infrastructures and slow connection speeds. The use of Web-based applications might increase as ICT costs decline, but the costs of dealing with new suppliers and customers will continue to be high. Most of the B2B e-commerce activities of developing country exporters are not dependent on very sophisticated ICT requirements. However, cost-effective and reliable access to telecommunication and Internet services is required.”

However, though there are some drawbacks and inconvenience, the overall outcome of the online business to business e commerce is truly a success in the field of technology and business.

sources:
http://www.jonathanbriggs.com/other/b2b-e-commerce-lecture,390,AR.html
http://www.onlinecommercepro.com/business_to_business_ecommerce.shtml
http://www2.computer.org/portal/web/csdl/doi/10.1109/MS.2008.136