Beyond the Hype: Making B2B E-Commerce Profitable

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After researching firms that have transferred their B2B transactions from a physical marketplace to an Internet-based one, Garicano and Kaplan devised a framework for analyzing existing and potential B2B e-commerce strategies. This method works for B2B startups as well as established companies taking their B2B transactions online, and it helps businesspeople judge whether a strategy has measurable benefits for both the company and its customers-important concerns that often were discarded in the initial wave of excitement over e-commerce.

The framework identifies five ways in which B2B e-commerce potentially affects transaction costs: changing business processes, altering the nature of the marketplace, modifying decisions by buyers and sellers, altering the amount of information available to buyers and sellers, and changing the ability of buyers and sellers to go through with a transaction.

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