BtoB

In new economy, some things will never change

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It turns out this marketplace stuff isn't rocket science after all.

As you can clearly see in the bang-up illustration that our art director, Marty Musker, has come up with to support this issue's e-hub how-to story, marketplaces can be extraordinarily complex by design.

They include a variety of players--buyers, sellers and middlemen of all sorts--and encompass a plethora of processes, including procurement, supply chain planning and logistics.

But what is lost in all of the hype is that effective e-hubs reflect existing business processes. In some cases, they reinvent them, but almost never do they shatter existing ways of doing business completely. At least not yet.

Business is still business. Buying and selling are still buying and selling. Marketing is still marketing.

The methods may change, but the endgame is still the same.

In reporting the stories accompanying our killer illustration, the number of ways that marketplaces continue to have ties to the past became clear:

• Marketplaces have physical sales forces and require that suppliers have them, too. There is no "build it and they will come" in b-to-b. Hubs have to sell themselves like crazy to gain traction.

• Today, most marketplaces market themselves in the most humdrum of ways. They attend trade shows. They do trade advertising. They use direct mail. In fact, there may be no bigger road-dog than an e-marketplace marketing manager who has to shill his wares at various vertical industry trade shows.

• Marketplaces require intensive domain expertise. Yes, it's great to have some Internet business and technology gurus to help e-marketplaces--and the companies that participate heavily in them--run on "Internet time." But in the end, industry knowledge is the killer app of the marketplace world.

• At least for the next few years, most relationships that begin online will end offline. Sure, there are a variety of tools for helping buyers and sellers launch requests for quotes, negotiate contracts, find financing, arrange shipping and more online. But today marketplaces augment existing relationships, they don't replace them completely.

Remember: Marketplaces will survive only if they make your company's buying and selling processes more efficient and less expensive. There was a time--a blink of an eye when the Nasdaq was running high--when marketplaces felt they could dictate to you how things were going to be. You had to change or get left behind.

That's all over now, Mr. Buyer and Ms. Seller. You hold the cards. Make marketplaces work for you.

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