Although there are some risks in participating in an electronic marketplace, the benefits should exceed the risks, in particular for small and medium sized companies.

 

Benefits:

• Access to new customers throughout the world, thus tapping an unexpected market
• Develop a web site that responds to a customer's need for information
• Decrease customer acquisition costs
• Provide access to market information, including current selling prices in various regions, sales activities of competitors, and early identification of industry trends
• Create the ability to place orders online
• Improve profitability through use of technology
• Design a web site that is technologically able to achieve these goals
• Enhance their credibility by projecting a professional online image
• Advertise in more countries at less expense
• Reduce cost of printing
• Answer questions on their products via e-mail
• Provide technical information online
• Provide online quotations
• Improve response time to customer inquiries
• Obtain feedback from customers to continuously improve products and service
• Post comments from satisfied customers for review by new customers
• Provide same-day service or service beyond regular office hours
• Use e-mail as a marketing tool
• Use e-mail as a customer communication tool
• Offer paperless documentation
• Better coordinate the supply chain
• Conduct -foreign market research online

 

Risks:

• Data exchange security risks
• Potential exposure of information such as your final sale price (known as bid acceptance) to competitors
• Current lack of standards among various marketplaces for aspects such as industry lingo and user interface, resulting in a steep learning curve for individual marketplaces.  This will be corrected by market shakeout leading to more efficient and uniform marketplace.