B2B E-commerce helps to remove barriers raised by geographic fragmentation of the market. While buyers get to know about new sellers with better products, suppliers discover new buyers. B2B also helps in eliminating unnecessary inventory build-up for both buyers and sellers. Lack of information about production schedules of the buyers lead to inventory build-up for the sellers. At the same time, the difficulty associated with finding alternative supply sources forces the buyers to build-up inventory. As B2B promotes information flow and enhances transparency, supply-chain management becomes possible. In addition, both the sellers and sellers enjoy reduced order processing costs and lower cost of interacting with each other.
Mere order matching, which earns commission, is just not enough for the third-party exchanges. They will have to strive to retain the buyers and sellers, that is, they have to provide other value-added services (providing specialised information, for instance) that help retain the existing sellers and buyers and attract fresh traders. Buyers and sellers, in turn, benefit through specialised information content. In effect, the market benefits from buyer and seller discovery and price and product transparency.
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