Aisling McCartney 12:29, 9 Sep 2004 (EST)
Most business conducted, both online and in the real world, is essentially Business-to-Business (B2B)(May, 2000, p.84). Although there are retail companies who deal directly with the consumer (B2C Companies), most corporations tend to sell their goods and services to other businesses. This is often easier than transacting with the end consumer (May, 2000, p.83). Business-to-Business applications are any business transactions between corporations (QUT School of International Business, 2003, p. xv). It is often described as “inter-company trading� (May, 2000, p.83). This includes manufacturers trading with retailers or even manufacturers dealing with other manufacturers. Most B2B is repeat purchase ordering (May, 2000, p.83) therefore the emphasis is on maintaining a good rapport with customers.
One example of a B2B application that is a popular form of eBusiness is procurement. Paul May (2000, p.125) describes procurement as being “concerned with the acquisition of non-production supplies within an organization�. This essentially means any resource that is not directly used to make the company’s product or service. Popular items of procurement include: office supplies, furniture, capital goods (computers and other office equipment), security systems, flooring and lighting (May, 2000, p.125). Businesses tend to purchase these items in bulk and repeatedly in order to receive trade discounts. The Internet can be utilized to place these orders in an efficient and inexpensive manner (QUT School of International Business, 2003, p.72). In addition to this, the World Wide Web allows the supplier to maintain and update their invaluable customer database as well as to deliver their latest catalog online (May, 2000, pp.125-131).
A second area of B2B eCommerce that is a rapidly growing industry is inventory exchange. Inventory has been described as the complete range of unused goods that a company has in stock (Dictionary.com, 2004) In today’s business world, possession of a large inventory is both costly to the corporation and highly inefficient. Companies should ideally aim to have their goods flow directly from the production line to the end consumer (May, 2000, p.132). Unfortunately, this is rarely the case and the company is left with a large devaluing inventory. However, goods that are a wasting asset for one company might be highly valuable to another. Inventory exchange corporations have established websites that do not minimize inventory but facilitate the redirection of resources (May, 2000, pp.132-133). This means that companies with excess inventory can post it on these website and other businesses that need the advertised inventory can bid for it. The inventory exchange website has no commercial interest in the products advertised, it simply acts as the communications medium between these organizations (May, 2000, p.133). One example of an inventory exchange eBusiness is FastParts.com. Established in 1996, this company facilitated the exchange of brand-new electronic components (May, 2000, p.133). A secondary example of inventory exchange is Noah’s Ark Wildlife Coalition Inc., a Brisbane based not-for-profit organization, and their ‘Waste Exchange’ program. Businesses can enter the Noah’s Ark website and list any excess resources that are reusable but would normally be landfill. Consumers can view this list and if they find a desirable item, Noah’s Ark will contact the company to organize an exchange.
One final and lesser-known area of Business-to-Business eCommerce is real-time collaboration. This area of eCommerce promotes partner inclusion and allows companies to study and assist in the organisational operations of other corporations online (May, 2000, p.139). The Internet allows individual businesses to combine their practices and organisations without having to physically relocate. This means increased efficiency and productivity at cheaper costs. It also means that a company in New Zealand could theoretically form a partnership with a company in France without either corporation having to reposition their production plants. As eCommerce continues to expand, physical boundaries will increasingly become irrelevant to B2B corporations.
Aisling McCartney 08:02, 29 Oct 2004 (EST)
Dictionary.com (2004) “Inventory� Dictionary.com, retrieved October 24, 2004, from http://dictionary.reference.com/search?q=inventory
May, P. (2000) The Business of eCommerce: From Corporate Strategy to Technology, Cambridge: Cambridge University Press.
QUT School of International Business (2003) Introduction to E-Business Revised Edition, North Ryde: McGraw-Hill Australia Pty Ltd.
