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What is Business-To-Business E-Commerce?

Business-to-business e-commerce may be defined as the buying and selling of goods and services between companies online. There are two distinct aspects of B2B e-commerce that separate it from the more familiar business-to-consumer (B2C) “e-tailing” model:

  • Flexibility in pricing. Transactions between businesses often require variability in the pricing of products between purchasers. This concept of haggling is rare in the B2C marketplace.
  • Integration of business systems. To realize increased productivity and savings, businesses involved in B2B will integrate their internal systems together, enabling less human intervention.

E-Procurement

Internet-based electronic procurement of goods and services between companies is called e-procurement. In the same way that B2C e-commerce is often referred to now as e-tailing, labeling B2B e-commerce as e-procurement better shows how B2B affects a company’s traditional supply chain.

E-Marketplaces

Electronic marketplaces, also known as B2B exchanges, serve as electronic hubs bringing together suppliers and purchasers in common virtual environments. E-marketplaces are either “many-to-many,” bringing together many buyers and sellers in a particular vertical market, or “one-to-many” where one major supplier or consumer will attract many of its trading partners to its e-marketplace. Over the past couple of years, it has been these private, one-to-many e-marketplaces that have proven to be the most successful. One well-known public Canadian e-marketplace is SourceCan.com.

Government E-Procurement

In their ever increasing need to label things they didn’t understand, marketing pundits began touting yet another e-commerce buzzword: B2G, or business-to-government, e-commerce. Buzzwords aside, e-procurement by various levels of government in Canada has been quite successful. MERX (www.merx.com/) is an online e-marketplace where businesses can bid on contracts from federal and provincial governments, and recently also the MASH (Municipal, Academic, Schools and Hospitals) sector.

MERX has opened up more opportunities for SMEs to bid on government contracts. It is free to browse MERX, and it’s available in both official languages. Alberta entrepreneurs can also access the Alberta Purchasing Connection at www.purchasingconnection.ca/ to bid on provincial government contracts.