The main volume of operations is carried out in electronic markets using B2B models, which have some similar features. For example, an electronic store (book, computer) can be equally used by individual buyers and businesses.
The B2B model of e-commerce includes a wide range of transactions between enterprises, including wholesale, the purchase of resources, technology, the purchase of services, production parts, and equipment, as well as financial transactions between enterprises, such as insurance, commercial loans, bonds.
Many enterprises and Network Security Services engaged in a B2B act as intermediaries between other enterprises that buy and sell goods and services.
The growth in productivity from this e-commerce model is due to:
• Increased efficiency from the automation of the transaction process
• The potential economic advantage of new intermediaries in the markets
• Consolidation of supply and demand through an organized exchange
• A change in the degree of vertical integration of enterprises
Traditionally, transactions between individual businesses begin with the fact that the buyer is looking for investment opportunities or the supplier is looking for a buyer of their goods and services. Buyers and sellers search using various advertising booklets, trade fairs, brokers and dealers. Sellers often operate through sales agents. Buyers, in turn, negotiate with potential sellers or their representatives about the details of the transaction in order to conclude a long-term or one-time contract- stated by famous Managed IT Support companies in the UK.
After the agreement is reached, for its implementation requires placing an order, organizing services for the delivery of goods, making a payment, confirmation of the payment and its receipt, as well as sending and receiving the goods and much more. The goal of e-commerce is to reduce costs before, during and after the transaction.
At the stage prior to the conclusion of the transaction, Internet technologies allow reducing costs for finding a buyer and a seller and the process of price comparison. According to Managed Security Services companies, it should be understood that the cost of finding a product (buyer) can be a significant part of the total value of the product, especially for small purchases. Traditionally, the task of providing information to customers (availability of goods, price, etc.) is performed by the marketing department of a commercial enterprise (supplier’s enterprise). The process of automating the provision of information makes it possible to free the staff from unnecessary work with potential clients and concentrate it on developing marketing strategies.
At the stage of the transaction, e-commerce reduces the communication costs of discussing the details of the transaction between the partners. Transactions made with the help of computer networks exclude the costs of document circulation, meetings, transport and time costs, etc.
After completing the transaction, e-commerce allows you to reduce costs for monitoring the execution of the transaction, communication, provision of after-sales services, etc. In addition, enterprises can use the information obtained as a result of the transaction in order to replenish the database of inventory, production and financial statements by automatically transmitting information using special computer programs that can be used in all areas of activity, including sales, purchases and internal and corporate operations.
Mediation is one of the fixed assets of information together with the buyer and seller. Intermediaries can reduce transaction costs by reducing the cost of research, quality certification, providing guarantees to buyers and sellers. Intermediary enterprises increase the efficiency of transactions by creating an exchange institution, bringing prices for communication services in reasonable accordance with reality, distributing goods and increasing liquidity.
Electronic commerce in the form of B2B transforms the traditional ways of running large and small businesses. Intermediaries reduce product search costs by creating consolidated markets, providing market information and offering a wide range of products and services. Buyers have the opportunity to increase the economic efficiency of their business by making a one-time purchase instead of spending time and money on contacts with numerous suppliers.
Many intermediaries working in the B2B system are trying to expand the range of services offered, providing, among other things, information not only about prices, but also about the possibilities of reducing them. Centralized markets often reduce time costs by providing opportunities for bilateral initiatives, using formal auction mechanisms and providing information on transaction prices.
In the electronic business activity built on the B2B model, the market segment occupied by intermediaries is highly competitive, primarily due to the fact that e-commerce tools drastically reduce barriers for entrepreneurs, enabling them to quickly enter electronic markets with minimal costs.
The cost of entry into the electronic market can also be reduced by leasing communications and computer equipment. In addition, entry into the market can be accomplished through outsourcing, using so-called electronic platforms. Currently, new software applications are appearing on the B2B market by IT infrastructure security companies from catalogs with fixed prices to catalogs, where prices are determined by auction rules.