Business Models & Activities of B2B E-Commerce

B2B involves the sharing and processing of information amongst businesses to enable commerce.

Business models are the collections of processes and activities that enable organizations to achieve their goals. E-commerce is the activity of conducting business over the Internet. The collection of business models, enhanced by technology that generates revenue from online activity and creates and promotes electronic sharing of information among vendors, suppliers and customers in this setting, is known as business-to-business (B2B) e-commerce.

Materials Acquisition

Materials acquisition is the process that facilitates (or supports) the purchase of raw materials or goods for resale. Within this activity, materials are ordered from various suppliers, and tracked and purchased using electronic data interchange (EDI). EDI is a fundamental component of the procurement process in many organizations. Procurement activities include items such as vendor selection qualification, price negotiation, shipment certification and acceptance, all of which are enabled through the activities of EDI within e-commerce.

Product Conversion

Conversion of raw materials and labor into finished goods occurs in the manufacturing process. Within B2B e-commerce, suppliers and vendors share information about raw materials and products as they transform them through the assembly, finishing, testing and packing process. Utilization of secured and expanded networks (extranets) enables each business partner in the supply chain system to share detailed information about product identification, progression and status at any given time.

Transportation and Logistics

Activities that categorize, store, distribute and ship the final product are recognized as logistics management. Both EDI and electronic fund transfer (EFT) assist companies in performing the activities that facilitate warehousing, shipping and monitoring the delivery of products to businesses within the value chain. Internet technologies also assist members of the supply chain system in reducing costs by evaluating various routing options for materials, comparing costs between shipping vendors, and enabling efficiency and accuracy in inventory control with concepts like Kanban (inventory replenishment triggers) or just-in-time inventory management.

Marketing

Marketing activities that support revenue models are achieved by sharing information with customers about products and services available for purchase. These marketing processes involve the creation of product catalogs, description of features, information regarding purchasing discounts and promotions, and details regarding loyalty programs. Electronic storefronts (or marketing websites) create inducements to attract consumers, inform them of current promotions and help promote selling activities.

References

• "Electronic Commerce"; Gary Schneider; 2010
• "U.S. EPA"; Lean Manufacturing and the Environment: Just-In-Time/Kanban; U.S. EPA; 2011