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The chemical industry seemed to be the perfect e-marketplace. Millions of products could easily be found, bought and sold on the Web. All this added up to a major paradigm shift in the way business was done in the chemical industry.
But except for one or two per industry, exchanges fared poorly. Widely heralded Chemdex died a year ago. And the malaise wasnt just in chemicals.
E-Steel.com, once solely an exchange for its namesake product, changed its name in November to NewView Technologies, signaling a move into licensed supply chain software to supplement its exchange. Similarly, Gofish.com, once a fish exchange, last year returned to its original core business of credit reporting in the seafood industry and changed its name back to Seafax.
The trend says two things. B2B concerns enjoying any measure of success usually come out of the industrial communities they serve or had an ongoing business before the Web emerged as their primary delivery vehicle. Take ChemConnect. With annualized deal volume at $2.7 billion and 16,500 transactions a month, its backers are 42 big chemical and plastics producers. The advantages are obvious, going well beyond simply the captive customers. Executives possessing deep industry knowledge and contacts are invaluable.
Youll often find that many extinct exchanges were either strangers or newcomers to the industry they pledged to change forever. Last week, chemical e-marketplaces became largely a field of one when ChemConnect bought competitor CheMatch. Many exchanges proclaimed they would bring down proven distribution networks. B2B transactions will account for $7.29 trillion in sales by 2004, or 7 percent of the worldwide sales volume of $105 trillion, Gartner said two years ago.
Well-funded online industrial communities arent the only ones getting traction in B2B exchanges. Some start small, like ChemBuyersGuide.com.
For $250 a year, chemical producers can list their product catalogs on ChemBuyersGuide.com. Buyers can search all the catalogs using the sites search engine. When you find what you want and who you want it from, youre taken to a company profile page. If you want to pursue it further, go to the vendors site or pick up the phone.
Sound like a $100 million startup like so many of the high-profile exchanges and e-marketplaces? Nope. Its 25-year-old Brian Perles working out of his home in Brooklyn, N.Y.
“We are just trying to make it easier for persons buying chemicals,” Perles said. “Were not trying to change the way business is done.” That sounds like a sensible approach.
Whats the future for e-marketplaces? Write to me at [email protected].