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B2B Virtual Marketplaces Are Becoming Big Business

March 22, 2000

Fifty food, beverage and consumer-product companies announced last week that they are working with the Grocery Manufacturers of America ( to create the food industry's "first business-to-business electronic marketplace." Including Coca-Cola Co., PepsiCo Inc., Clorox Co., Procter & Gamble Co. and Ralston Purina Co., this electronic marketplace is sure to get the attention of any small business that sells to these powerful companies.

The initiative aims to "bring multiple buyers and sellers into a virtual marketplace to support catalog purchasing, bidding and price quotes, online sourcing and auctions for raw materials, packaging supplies, and other goods and services," according to the association. The $460-billion industry spends about $200 billion a year on goods and services.

The announcement comes on the heels of similar announcements from the automobile industry. Last month Ford Motor Co., DaimlerChrysler Corp. and General Motors Corp. agreed to create an Internet-based trade exchange to link the Big Three auto makers with suppliers, including thousands of small businesses. The three auto makers spend about $247 billion a year with their suppliers.

Some individual companies already use the Internet to communicate with their suppliers. GM and others provide supplier contact information on their Web sites.

While large companies are just starting to develop their own business-to-business, or B2B, initiatives, smaller firms and associations are already doing business via the Internet.

EBay, for example, last week introduced its new "business exchange," an auction site where small businesses can buy or sell computer hardware and software, industrial equipment, office equipment and tools.

I wouldn't know what to do with an "indexable insert drill," but if I did, I could bid on one at the EBay site. I do know something about color printers, and the prices listed were reasonable. Of course, what you pay at any auction is a bit of a crapshoot. You might luck out and get a very good deal. For sellers, these sites are a way to sell excess inventory or supplies or auction off their own products or services.

Comauction (, which bills itself as the "business-to-business auction site," provides a marketplace for a vast number of products and services, including raw materials for manufacturing (anyone need 10,000 fender washers?), components, agricultural supplies and equipment. You can also buy and sell services including training seminars, insurance and even storage. If you search for auctions on Yahoo, you'll get plenty of B2B examples, including for those of you in need of forklifts, air compressors and the like., a successor to Dove Bros., which has been conducting business auctions since 1937, is now providing online commercial auctions to a variety of industries, including printing, medical, biotech, office equipment and telecommunications. links buyers and sellers of all types of business equipment. The company plans to launch a "reverse auction," which allows a buyer to initiate an auction by making a request for specific products and services.

There also are many industry specific sites. VerticalNet ( operates sites in numerous industries, but for an exhaustive list of B2B sites, check out listings at

Although not auction sites, there are also marketplaces that link buyers and sellers of common business and consumer services. Like, is seeking affiliations with service professionals. The site links customers with electricians, carpet layers, movers, landscapers, photographers and more.

Technology reports by Lawrence J. Magid can be heard at 2:10 p.m. weekdays on the KNX-AM (1070) Technology Hour. He can be reached at His Web site is at

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