International B2B Markets and E-commerce
This section gives reasons why firms in the same industries are often located in the same geographic areas. Additionally, e-commerce is defined and its effect on B2B markets explained.
B2B markets are often distinguished by their geographic areas. Companies doing business with each other often cluster together in particular areas of the country because the human and natural resources needed are located in some areas and not in others. Additionally, suppliers want to be close to their buyers, so they locate their operations nearby.
Examples of clustering include:
- Gulf Coast - oil-related industries
- Silicon Valley - high-tech companies
- Wall Street - banks and financial institutions
- Napa Valley - wine related industry
Types of B2B web sites include:
- Sell side sites such as the Union Pacific site; in which a single seller sells products to many different buyers.
- Buy side site is one in which a business buys products from multiple sellers that go to the buyer's site to do business with the firm. Some government agencies have buy side sites.
- B2B exchanges are e-commerce sites where multiple buyers and sellers go to find and do business with each other. These exchanges are similar to Craig's List but comprised solely of business buyers and sellers.
- B2B auctions are web-based auctions that occur between businesses. The auctions can be sell side or buy side. Sometimes sell side auctions are referred to as forward auctions. Buy side auctions are initiated by the buyer. Sellers bid against each other for the buyer's business. Buy side auctions are sometimes referred to as reverse auctions. Ebay has been used for B2B auctions.