B2B Exchanges are Cost Effective

In the era of Globalization, the business rules and business processes are being redefined. Every business whether big or small, whether a Multinational or a small scale enterprise, have no option but to get on to the internet wagon both for their sales as well as procurement activities. Globalization has thrown open the markets and erased the borders. It is now possible for a small little factory operating in a corner in Philippines to dream of supplying his ware to an American Company or a European company and expand his business, thanks to B2B Exchanges.

If you go through the B2B Exchanges that are operating on the Internet, you will find such exchanges in practically every field of trade be it the metals, the commodities, chemicals to electronics, hardware as well as live stock etc. The traditional market place has been re-invented into virtual markets on the internet.

B2B exchanges are here to stay, simply because they are found to be a lot progressive and provide improvisation as well as cost advantage as compared to physical markets. There are various types of B2B Exchanges from online auction, simple market place to vertical and horizontal markets for each field of business.

B2B exchanges make sense in a lot many ways. One of the major factors being the cost of operation, B2B exchanges provide huge cost advantage in terms of savings in operational space, infrastructure and resources. The best examples here would be that of the Stock exchanges which require huge floor space and infrastructure to operate. The real estate prices are exorbitant and the Stock exchanges require a number of floors to house their brokers, computers, network, support staff etc. The operational expenses can be quite humongous. With virtual Exchange, the Stock Exchange would have to worry about investing into technology to drive its operations and business without any investment into the physical set up. Investing into web based technology solutions will enable the members and stock dealers to operate out of their homes or offices or from any location and access their accounts and conduct their business without having to be physically present at the stock exchange. Availability of online data and instant information at the finger tips makes it possible for the customers to receive better value addition, compare and conduct their business with transparency and increased speed, thus increasing the value proposition offered by the exchange through its online internet backbone. This helps cut down the operating expenses of the customers as well who get to save on telephones, faxes and couriers etc which would otherwise have been spent in seeking and obtaining data and information to help with their business.

Technology has made it easier to store and publish data as well as to update the data electronically. The time as well as cost required to print and produce brochures and reports can now be cut down and huge savings accrue for all the businesses.

Though one might argue that the savings that accrue out of operational costs for various businesses is set off by the investments that they are required to make in developing technology solutions, the per transaction cost of technology becomes miniscule compared to the physical operational costs. The volume of business and transactions that the technology solution can handle is very huge as compared to the physical resources. These hold good especially in industries like Stock exchange, Insurance, Airlines and other service industries.


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