E-Marketplaces and B2B Portal: Ecommerce

Ecommerce

Methods of Procurement: The Merits and Drawbacks of e-Marketplaces

In basic terms, e-marketplaces bring together sellers as well as business-to-business buyers in a more efficient platform. It is important to note that as is the case with other procurement methods, e-marketplaces have their drawbacks and merits. To begin with, with regard to merits, e-marketplaces effectively reduce purchase and administrative costs. In the past, procurement has been associated with complex activities that involve a lot of paperwork and documentation. The e-marketplace promotes paperless transactions; meaning that staff can be relieved of some administrative burdens -- resulting in administrative cost savings. Consequently, the low administrative cost benefits also accrue to suppliers -- meaning that they are likely to give discounts, effectively reducing purchase costs. Other key advantages of e-marketplaces include, but they are not limited to, reduced purchase cycle time and order error rate, as item selection is done from catalogues.

E-marketplaces also have some drawbacks. One of these is security. As with any kind business conducted online, there is always the likelihood that critical information or even money could be lost to cyber crooks. It should also be noted that the costs involved in switching from one procurement method to another could be prohibitive, i.e. integration and set-up costs.

B2B Portal: Benefits of Setting up an Information Portal

Business to business (B2B) has got to do with the exchange of products, information, as well as services between business entities. It is important to note that thanks to the internet, it has become easier for buyers as well as sellers of goods and services to not only meet, but also transact in virtual cyber markets. A B2B portal, in basic terms, "provides access for B2B customers to do online ordering, check order status, payment status, and product information" (Tatnall, 2007, P. 280). It could, therefore, be viewed as "an additional portal if a B2B relationship exists in the e-commerce portal" (Tatnall, 2007, p. 280).