Focus on Technology: E-commerce exchanges: with friends like these ...
Potentially beneficial to many, Web marketplaces threaten to disintermediate wholesalers.
After years of waiting for an easy way to conduct e-commerce with manufacturers and customers, wholesalers may have gotten their wish: Internet exchanges allow buyers and sellers to trade electronically. This is an extremely powerful concept and potentially beneficial to many wholesalers, but these Web marketplaces threaten to disintermediate wholesalers en masse. This article explains the nature and functions of online exchanges, pro and con, and describes the full impact of disintermediation.
What is an exchange?
Industry-specific or vertical exchanges are electronic marketplaces that allow manufacturers, suppliers, wholesalers and sometimes customers to buy and sell online. The goal of exchanges is to eliminate cost from the supply chain by reducing the time and paper it usually takes buyers and sellers to source and complete transactions.