The past few years have seen increased use of electronic marketplaces that bring thousands of suppliers together with thousands of buyers. The objectives of these net marketplaces are to have suppliers compete on price, to encourage automated low-cost transactions, and to reduce the price of industrial supplies.
E-distributors are the most common form of net marketplace. E-distributors provide electronic catalogs representing the products of thousands of suppliers. E-distributors are independently owned intermediaries that provide a single source for customers to make spot purchases. About 40 percent of a company's items are purchased on a spot basis. E-distributors typically have fixed prices but do offer quantity discounts to large customers (see Chapter 12). The primary benefits of e-distribution to the manufacturing company are lower product search costs, lower transaction costs, a wide selection of suppliers, rapid product delivery, and low prices.
Independently owned net marketplaces having catalogs representing thousands of suppliers and designed for spot purchases.
Companies that connect on-line MRO suppliers to businesses that pay fees to join the market, usually for long-term contractual purchasing.