E-marketplaces, online auctions and exchanges

Online auctions and exchanges have played an important role in the growth of e-purchasing within businesses of all sizes and types.

E-procurement

There are two parts to the e-purchasing cycle - the more established part is e-procurement. This has been developed in recent years to deal with the process element of electronic purchasing.

E-procurement uses the internet to operate the transactional aspects of requisitioning, authorising, ordering, receipting and payment processes for the required products or services.

Many e-marketplaces offer transaction services that automate many aspects of the procurement cycle for both the buyer and the seller.

E-procurement covers the following areas of the buying process:

• requisition against an order
• authorisation
• order
• receipt
• payment

E-sourcing

The other element of the e-purchasing cycle is e-sourcing.

E-sourcing uses the internet to make decisions and form strategies about how and where services or products are obtained. E-marketplaces can play an important role in this activity since the price and availability of products from multiple suppliers can be checked from a single point.

E-sourcing covers the elements of the buying process which are at the discretion of specialist buyers, including:

• knowledge specification
• request for quotation/e-tender/e-auction
• evaluation and negotiation
• agreeing on contractual terms

E-marketplaces are attractive product sourcing platforms as they provide detailed product information from existing suppliers. Finally, they also give you access to new potential partners and suppliers. Jointly using reverse auctions and online exchanges encourages competitive bidding between suppliers.