Business-to-business electronic commerce (e-commerce) is projected to be more than $300 billion by 2002. This makes it the fastest growing segment of our economy and one a woman-owned business cannot ignore.
Electronic commerce is the conducting of business transactions over an electronic interface such as a credit card machine or computer. With the expansion of the Internet, businesses are noticing and adopting e-commerce practices at a phenomenal rate. Now it is possible for businesses to exist in a totally virtual environment without even owning a real “Brick and Mortar” store. Amazon.com is an example of such a business. In reality, however, most businesses will maintain their storefront while using e-commerce as an additional way to buy and sell.
E-commerce is changing “business as usual.” It is changing the way products and services are sold, just as when any new major communications technology is introduced. Everything will move faster and expectations will change in other ways. Lead times for responses to Request for Quotes (RFQ) will get shorter. A business will be expected to have better information on orders. Buyers will expect their suppliers to have e-commerce capabilities.
E-commerce simplifies the industrial purchasing process by automatically and directly linking buyers with sellers of products and services, thus reducing bureaucracy, increasing efficiency and expanding the economic opportunity for all businesses.
Many progressive small businesses have had the experience of launching a web site in cyberspace. Most have come to realize that attracting visitors, particularly local visitors, is a significant problem. And many businesses are only interested in competing within a specific market.
Business-to-business e-commerce platforms, such as Purchase Pro.com Inc., are comprised of buyers or “anchor companies,” companies with very significant buying power and a high awareness in the market, and sellers, such as small businesses.
E-commerce platforms such as Purchase Pro are rapidly able to create a community with sufficient size to generate sales yet avoid the ‘lost in space” experience. Members who want to compete nationally can receive RFQs from such large buyers as Carnival Cruise Lines and MGM Grand.
A leading business-to-business e-commerce company, the Purchase Pro solution creates an e-commerce Intranet between buyers and sellers, while simultaneously raising the visibility of member companies within Purchase Pro’s nationwide network of buyers and sellers. Purchase Pro simplifies the industrial purchasing process by directly linking buyers with sellers of products and services, thus reducing bureaucracy, increasing efficiency and expanding the economic opportunity for all businesses.
Purchase Pro recently signed strategic partnership agreements with the National Association of Women Business Owners (NAWBO) and National Women Business Owners Corporation (NWBOC). These partnerships will enable members of these women business organizations to dramatically increase sales to large and small companies who are committed to sourcing and conducting a percentage of business with women and minority-owned businesses.
“Working with the leading advocates for women-owned businesses, Purchase Pro is setting the standard for business-to-business e-commerce in corporate America,” said Charles “Junior” Johnson, founder of Purchase Pro. “One of the biggest barriers is finding businesses that fit the requirement of being women-owned. To meet this need, we have created a new channel for businesses to capitalize on this opportunity as Purchase Pro becomes a national standard. We are confident that businesses of all sizes will realize substantial cost savings in their procurement processes, while knowing their products and services are simultaneously being exposed to a nationwide network of potential buyers.”
NAWBO members receive discounted rates on the Purchase Pro network. Through this relationship, member companies have an opportunity to realize tangible business savings while simultaneously entering the interactive age.
There is a big advantage for the “anchor companies”, too. First, they support the e-community because they understand the benefit it can afford the local economy. Second, they want to enjoy the cost savings potential it offers. Purchase Pro has case studies based upon the experience at MGM Grand and Caesar’s Palace documenting “hard cost” savings of 12-22 percent, but the “soft cost” savings are equally interesting.
A major power company recently joined Purchase Pro primarily for the “soft cost” savings. The company spokesperson says that it cost $135 per transaction from RFQ through PO. With the efficiencies gained by joining and doing paperless transactions, they project a savings of $100 million over the next ten years!
As a community gets big enough, sellers will find that their cost of selling and servicing accounts in the community drops. Similarly, the ‘soft costs’ such as time and effort involved in purchasing are reduced. The current resources of phone, fax, catalogs and mail are time consuming and often not available. In contrast, the electronic community works 24 hours, seven days a week.
E-commerce solutions enable business members to both buy and sell electronically, reducing the cost involved in both activities. In addition, small business suppliers are able to improve their service level. As an example, they are able to instantly provide needed product or service information. They can transmit item availability and delivery information with electronic speed. Since all communications are electronic and real time, there is no need to search through out-of-date catalogs, call for current pricing, type out and mail Purchase Orders. Selling activities are similarly more efficient with the cost of printing and distributing catalogs, eliminated.
Mary Schnack is a principal in Schnack & Brody Communications, a public relations agency with offices in Southern California and Arizona.
