then offers are awaited. Aggregators involve a group of purchasers combining to pur-
chase a multiple order and thus reducing the purchase cost. General Electric Trading Post
Network was the first to set up this type of arrangement (http://tpn.geis.com– site no
longer available), but it remains uncommon in comparison to the other two alternatives.
(c) Neutral sites or intermediaries (neutral location – many suppliers to many customers). For
consumers evaluator intermediaries that enable price and product comparison have
become commonplace as we have seen. B2B intermediaries are known astrading
exchanges, marketplacesor hubs. Examples of independent B2B exchanges mentioned
in the previous edition are Vertical Net (www.vertical.net), Commerce One Marketsite
(www.commerceone.com) and Covisint (www.covisint.net), none of which now exist
in their original form. While some B2B intermediaries remain for some commodities
or simple services (for example, EC21 (www.ec21.com), Elance (www.elance.com),
eBay Business (http://business.ebay.com)) the new trading arrangements have not
developed as predicted by many analysts due to the complexity of business purchase
decisions and negotiations and their destabilising nature on markets.Commercial arrangement for transactions
Markets can also be considered from another perspective – that of the type of commer-
cial arrangement that is used to agree a sale and price between the buyer and supplier.
The main alternative commercial arrangements are shown in Table 2.3.
It can be seen from Table 2.3 that each of these commercial arrangements is similar to
a traditional arrangement. Although the mechanism cannot be considered to have
changed, the relative importance of these different options has changed with the
Internet. Owing to the ability to rapidly publish new offers and prices, auction has
become an important means of selling on the Internet. A turnover of billions of dollars
has been achieved by eBay from consumers offering items ranging from cars to antiques.
Many airlines have successfully trialled auctions to sell seats remaining on an aircraft
just before a flight.CHAPTER 2· THE INTERNET MICRO-ENVIRONMENT
Table 2.3 Commercial mechanisms and online transactions
Commercial (trading) mechanism Online transaction mechanism of Nunes et al. (2000)
1 Negotiated deal Negotiation – bargaining between single seller and buyer
Example: can use similar mechanism to auction as on Continuous replenishment – ongoing fulfilment of orders
Commerce One (www.ec21.com) under preset terms
2 Brokered deal Achieved through online intermediaries offering auction
Example: intermediaries such as Screentrade and pure markets online
(www.screentrade.co.uk)
3 Auction Seller auction – buyers’ bids determine final price of
C2C: eBay (www.ebay.com) sellers’ offerings
B2B: eBay business (http://business.ebay.com) Buyer auction – buyers request prices from multiple sellers
Reverse – buyer posts desired price for seller acceptance
4 Fixed price sale Static call – online catalogue with fixed prices
Example: All e-tailers Dynamic call – online catalogue with continuously
updated prices and features
5 Pure markets Spot – buyers’ and sellers’ bids clear instantly
Example: Electronic share dealing
6 Barter Barter – buyer and seller exchange goods
Example: http://www.intagio.com