B2B Integration : A Practical Guide to Collaborative E-commerce

E-Marketplaces and Collaborative Networks 445
It has inherent advantages over fixed price trading because of its
superior ability to:
• Dynamically adjust the prices in situations with high uncertainty or in
response to change in supply/demand (driving down prices to sell off
end-of-life products and reduce the impact of inventory write offs); and
• Allocate goods and services from those who can provide them most
efficiently to those who value them the most.
15.2.6. Governance of e-marketplaces
Just as stock exchanges, such as the NSE and the NYSE, provide
governance for trades transacted through them; in a similar way,
e-marketplaces have to provide governance to ensure transaction
reliability, enforceability, fairness and honesty in dealings among parties
that trade on the exchange. E-marketplaces have to make sure that the
participating companies do not misuse the system and uphold their
responsibilities and obligations. E-marketplaces should set up a set of
rules and procedures that define the dos and the don'ts of the operational
standards and a standard of conduct for participants.
The key features of a B2B e-marketplace governance mechanism are:
• Standardization of the contracts that trade on the e-marketplace;
• Agreements between the e-marketplace and its participants; and
• Standing committees to assure enforcement and participant input.
15.2.7. Benefits of B2B e-marketplaces
The benefits of B2B e-marketplaces are:
Common benefits to all participants
Benefits enjoyed by all participants of an e-marketplace are:
• Dynamic price determination due to real-time connections between a
large population of buyers and sellers;
• Optimization of resource utilization and improved scheduling and
cycle times throughout supply chain;