e-Marketplace general guidelines

To help you determine if the e-Marketplace composite pattern is appropriate for the design of your Web-based application, this page details additional information about e-Marketplaces and their design.

An e-Marketplace is an electronic gathering place that brings together multiple buyers and sellers. An e-Marketplace provides its members with a unified view of goods and services and lets its members perform transactions in the e-Marketplace.

At the highest level, e-marketplaces can be segmented into two types:

• Horizontal e-marketplaces typically focus on reducing the inefficiencies of spot purchasing. Often these marketplaces extend enterprise software or services. The primary value proposition of a horizontal e-marketplace is the delivery of goods and services at reduced prices.
• Vertical e-marketplaces facilitate the exchange of manufactured inputs to specific vertical industries, utilizing the Internet's connectivity to eliminate an industry's "pain points." Vertical e-marketplaces enter an industry's supply chain and add value by efficiently managing interactions between industry buyers and sellers. They offer advantages for both systematic and spot transactions. The vertical e-marketplace's model is currently receiving the greater amount of attention.

The three basic transaction models that currently exist in the e-marketplace are aggregators, auctions, and exchanges.

• Aggregators facilitate trade by consolidating multiple vendors in a single location. With searchable databases of vendor product information in a common format, buyers can efficiently select products with real-time pricing, product descriptions, and comparisons at a single point of contact. The aggregator model is the simplest of the three models and is therefore the most commonly adopted. It is also the model that companies are most comfortable with because of its product breadth and static pricing mechanism.
• Auctions are used to unload surplus products and increase inventory turnover. Auctions are focused on delivering to buyers goods or services with reduced prices and creating a controlled competitive buying venue to quickly liquidate excess or used equipment.
• Exchanges provide trading rules and historic pricing that enable fast trading by matching bid-ask offers and pricing in real time. Exchanges are the most complicated of the transaction models.

The e-Marketplace is created and maintained by a "market maker" who brings the suppliers and vendors together. The market maker assumes the responsibility of e-Marketplace administration and performs maintenance tasks to ensure that the e-Marketplace is open for business.

A market maker's primary purpose is to bring together a target audience of corporate buyers and sellers to solve specific industry problems imbedded in the trading process. Market makers provide solutions that go beyond the first wave of B2B e-commerce to provide dynamic, open e-Marketplaces that can enter the supply chain of vertical and horizontal industries, introducing new ways of buying and selling.

By simply resolving inefficiencies, market makers act as catalysts to compress process time, decrease costs, and improve business processes in ways previously unimagined. By adding value beyond efficiency, market makers can revolutionize the way trading partners do business.

Chapter 1 of the IBM® redbook e-Marketplace pattern using WebSphere® Commerce Suite, MarketPlace Edition; patterns for e-business Series, SG24-6158-00 includes a discussion of the following issues relevant to e-Marketplace development and market maker success:

• The buy and sell sides of an e-Marketplace
• Horizontal and vertical e-Marketplaces
• The four main transaction mechanisms in any e-Marketplace
• Value market makers can provide to an e-Marketplace
• Challenges and inhibitors market makers face
• Critical success factors for market makers
• Successful design of e-Marketplace solutions
• Key factors for attracting e-Marketplace participants and maintaining their participation
• Characteristics of an effective e-Marketplace platform
• The future of e-Marketplaces
• IBM WebSphere Commerce Suite, Marketplace Edition for AIX®

If you have determined that the e-Marketplace composite pattern can provide an appropriate solution design for the application you are developing, next select an Application pattern.

If the e-Marketplace composite pattern is not appropriate for your development efforts, review the Business patterns to determine which pattern best addresses your e-business needs.