Companies are pursuing b-to-b e-commerce via many avenues. Some conduct transactions on their own Web sites. Others have formed consortiums to build industrywide e-marketplaces. And then there are the independent trading exchanges.
Conducting e-commerce through trade associations is one avenue that has been largely ignored. But a handful of companies, including eSociety Inc. and Unibex Inc., are creating e-marketplaces for trade groups, such as the National Housewares Manufacturers Association and National Association of Manufacturers. "An industry association is clearly neutral, and it offers liquidity in bringing buyers and sellers together," said Anne Gordon, CEO of Bellevue, Wash.-based eSociety.
Additionally, if an industry association produces a trade show, it is already in the business of facilitating commerce. Creating an e-marketplace seems a logical step, said Mady Jalinous, president-CEO of Washington-based Unibex. "It makes sense to supplement [a trade show] with a virtual trade show that's open 24 hours, seven days a week, all year round," he said.
But analysts warn obstacles do exist to converting trade associations into e-commerce platforms. "They will have the same type of growing pains that VerticalNet has had in how to bring community to electronic commerce," said Pierre Mitchell, senior analyst-e-commerce for AMR Research Inc. "The question is how do you make money out of them."
So far, eSociety has developed Web sites for three organizations--the National Housewares Manufacturers Association, Northwest Venture Group and Consumer Science Business Professionals. It is also developing an e-marketplace for the National Truck Equipment Association that is slated to be operational this summer.
The NHMA site, which launched March 15, includes basic features such as registration for the association's International Housewares Show, a news feed and a job bank. "That's the low-hanging fruit, the gimmes," said Perry Reynolds, the NHMA's director of marketing.
The NHMA's site also has a b-to-b housewares exchange, where member companies, which make everything from popcorn poppers to mops, can sell their products online to retailers. The organization won't release financial figures, but site traffic is up 880% from a year ago, Reynolds said.
The appeal of such a site to an organization's members--many of whom are small companies hard-pressed to invest in building a sophisticated transactional site on their own--is the pooling of funds to create a shared e-commerce platform.
James Carney, executive director of the NTEA, expects his organization's site to appeal to members with medium-sized businesses. "I don't envision Ford or Freightliner using this site," he said. "On the other hand, I'm not sure that the guys who are less than $1 million will use it much either. They haven't caught up with the technology just yet."
eSociety tries to create partnerships with its customers, and its compensation is weighted to the back-end. Gordon said the company shares about 50% of the site revenues with its not-for-profit customers.
Jalinous said Unibex can create an e-marketplace for about $50,000. It then takes a share of the revenues generated from a site's subscription and other fees.
Unibex, which doesn't market its products exclusively to trade organizations, has created five sites for the 14,000-member National Association of Manufacturers, which counts nearly 400 smaller trade groups among its members. Unibex has created Manufacturingcentral.com, which is NAM's umbrella site and features a virtual trade show, auctions and a news feed.
Portal for smaller sites
Manufacturingcentral.com, operational since March 13, also serves as a portal for other smaller organization sites created by Unibex, such as Buyreman.com, a site for the Automotive Parts Rebuilders Association, and Candycommerce.com, a site for the National Confectioners Association. Nearly 1,300 members already have a presence on the various Manufacturingcentral.com sites, said Tom Orlowski, NAM's VP-information systems.
The main question, however, remains: "Can they turn a great networking opportunity into an e-commerce success?" asked Mitchell. "It's unclear." site traffic is up 880% from a year ago, Reynolds said.