Role of Mobile Computing in E-Commerce

Role Of Mobile Computing & Security Concerns

B2B Models

As defined by Turban (2012), “Business to business e-commerce (B2B EC), also known as electronic B2B (or eB2B) is transactions between businesses conducted electronically, i.e., over the internet, extranets, private or social networks.” Such transactions can take place between a business and its partners – suppliers, marketers, supply chain members, delivery agents or with any other business, such as the government. The ever-changing nature of e-business requires changes to existing business models to reflect and adopt to the changing new environment. Organizations operate with a wide range of e-business models, many of which are not well understood by potential users. Adding more dollars to the bottom-line, increasing the company’s revenue, capturing, monitoring and maintaining edge over your competitors - this is what B2B EC is all about (Derfler, 2000).

B2B EC can be classified into four categories of models in terms of their functional characteristics or the kind of market participants they cater to, namely:

Sell-side model: In this model, a manufacturer or a retailer sells directly to the consumer from a storefront or webstore (Turban, 2011). This allows manufacturers to reach buyers directly over electronic media, hence eliminating middlemen and shortening the distribution channel. This results in improved efficiency, quicker and better customer service, a better understanding of customers’ preferences and the ability to reach a larger customer base owing to the direct cost benefits (no overhead costs) to the consumers. This model is supplier centric, therefor it is also called a supplier model. E.g., Cisco, Intel, Dell etc.

Buyer-side model: In this model buyers open their own marketplaces called buy-side e-marketplace and invite sellers to browse their marketplace for open orders in an attempt to fulfill the order demand. This is also a buyer centric model. It encourages potential suppliers to initiate business relationships or transactions by approaching the buyer for fulfilment of required products or services. Additionally, this model has enabled buyers to reduce their costs with the ability to view the list of products or services being offered to them, but has also enhanced customer relationship management through the acquisition of prompt replies or responses from suppliers. E.g., MRO’s, Amazon.

Third-party or brokerage model or exchange model: Such a model comprises of the middlemen agencies or intermediaries that match the sellers to buyers by presenting catalogs, information and by providing a platform to make the transaction.  They earn their revenue by charging a small fee from both the parties for each transaction completed between the seller and buyer. E.g., Intercontinental Exchange (ICE), Buyerzone.com, higpa.org, United Sourcing Alliance.

Merchant model: These models allow traditional wholesalers to sell their goods and services via the internet based on list prices or through auctions. These models are generally created and implemented by wholesalers. It is an e-storefront that seeks to establish a new distribution or marketing channel via the internet. The merchant model most relevant to B2B e-commerce is the online storefront model which is usually operated by wholesalers and retailers over the internet and allows the provision of updated information on products and services while having the ability to instigate immediate business transactions. In addition, this model also provides customer support and includes the marketing of products and services that are being offered with minimal costs incurred in sales and promotion. E.g., Best Buy, E-Bay, Amazon.