B2B exchange is a website, which facilitates companies to buy from and sell to each other using a common technological platform. These exchanges also offer other services such as logistics management and payments. B2B exchange is popular as it ensures transparent and efficient transactions, businesses can find the perfect market for their products with the best price establishing mechanism. Business benefit greatly as information is easily accessible and current as well as offering the participating business global reach. Using B2B cuts down operating costs greatly, reduces inventory as well improve supply chain integration.

Types of B2B Exchanges:

There are several types of B2B exchange such as auctions {forward/reverse}, bulletin boards, independent exchanges, private exchanges, aggregators etc. example of an auction based B2B exchange is the successful eBay. The least popular of these is the bulletin board, as it is hard to make money from them; aggregators assemble buyers and negotiate with sellers. These exchanges can be public or private B2B exchanges. Investors or consortia usually own public B2B exchanges and these exchanges have a set of directors to operate the exchange. These exchanges are usually open to other businesses for a small fee. Private exchanges are owned and run by a single company to do business with their established partners. B2B exchanges offer a platform for buyers as well as sellers to interact and conduct business. They have unique digital ids for all participating businesses and effectively use identification and authentication technology to operate successfully. They are helpful in streamlining business processes and ensuing efficient inventory management, help businesses serve customers better, offer a low cost and easy to operate sales channel for participating businesses and drastically reduce paperwork.

Some B2b exchanges are industry specific, some are open to those within a geographical location only and some exchanges focus more on supplying business tools to participating businesses. It is imperative that the exchange offers a detailed product catalogue that conforms to industry standards, facilitate product search within the exchange, have a current directory of members, offer tools to add products and edit contents easily and offer to promote and advertise products effectively. They should have a large participating member base, should be neutral and more flexible. Businesses tend to favor private exchanges to public exchanges as they feel private exchanges are more trustworthy and dependable. Private exchanges are preferred because of the security it offers to the participating businesses.

B2B exchanges are not as popular as they were expected to be because of the immense changes needed to the infrastructure as well as concerns regarding security of information and the biggest hurdle is the antitrust challenges that may arise. Thus, B2b exchanges have evolved and here to stay, they will develop further only if businesses can comprehend the cost savings and the numerous advantages offered by participating in a B2B exchange.