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Transcript of E-Procurement
Ryan Poh 21347642
Kathryn Gledhill 10502346
Robin William Broom 20781762
Shengting Li 21350604
An auction can be defined as a market mechanism characterized by the dynamic nature in which final prices are determined through negotiations between buyers and sellers.
Similarly, E-auctions are auctions conducted via an online platform.
- English/Yankee “Forward auctions”
- Dutch/Freefall “Backward auctions”
Buy-side e-marketplace, orders from several buyers are aggregated into large volume purchases to negotiate better prices from sellers
- Consist of a product database, directory, and a presentation function.
- For customers’ purpose an EC is there to locate info on products and services. For merchants it is a tool for advertising and promoting products.
- Generally in electronic catalogues prices are fixed.
- An E-marketplaces can be described as a B2B internet platform providing an internet-based solution that aims at facilitating new trading relationships between companies, or supporting existing ones.
- No fixed prices
- Based on changes in supply & demand
The internet provides a cost effective infrastructure for executing auctions electronically, coupled with a wide array of support services as well as the opportunity to reach buyers and sellers from around the world.
- Proprietary websites
- eBay, Liquidation or Government Auctions
Benefits to Suppliers
- Liquidate surplus inventory
- Revenue generation
- Optimal price setting
- No intermediaries
- Cost savings
- Increased stickiness (number + length of visits)
- Customer acquisition and retention
- Real time communication
- Increased transparency
- Efficiencies in customer service
Benefits to Buyers
- New purchase opportunities
- Lower prices
- Entertainment value
- Real time market information
- Expedited order processing
- Possibility of fraud
- Minimal security
- Limited participation
- Non payments:
- Bid shielding – phantom bidders bid at very high price when auction first begins, and pulls out at last minute.
- Bid shilling – placing fake bids on auction items to artificially jack up the bidding price.
- Many potential buyers and one seller
Internal v External Aggregation
- External (third party)
Benefits to Suppliers
- Better prices, selection, and services
- New buyers who may ordinarily be priced out
- Less product stagnation
- Less wasteful administration
- Pleasant experience = repeat business
- Small businesses need to team up
- Cost of a third party aggregator
- Not as fast as other methods
- Recommended for health, school and government organizations
Evolution of the Electronic Catalogue
- Early online catalogues were mere replications of print and text catalogues.
- Then they were moved to CD-ROM
- Currently they are dynamic, customized, and integrated with selling and buying procedures, shopping carts, order taking, and payments.
Creation and Maintenance of Catalogues
- Creating and maintaining a catalogue requires certain “enablers” these are the following:
information-publishing tools, search engine catalogue software, transactional capabilities(electronic shopping cart), payment services, or customer relationship management functionality
Customizing Electronic Catalogues
- Usually done for B2B however is rarely done for B2C.
- There are two approaches to customizing an electronic catalogue;
Letting the customers identif parts they want or by letting the system use transaction records to identify them.
Benefits of Electronic Catalogues
- Easy to update product info
- Good search and comparison capabilities
- Long term cost savings
- Easy to customize
- Ease of connecting order processing, inventory processing, and payment processing to the system
Disadvantages of Electronic Catalogues
- Difficult to develop catalogues and they come with a large initial fixed cost
- Need for customer skill to deal with computers and browsers
Benefits to Buyers and Sellers
- Process improvements
Sellers: Marketing instruments
- Cost reductions
Buyers: *Transparency of price
Sellers: *Standardization and automation
- New business generation
Buyers: Price and quality
Sellers: Customer base
- Incomplete information
- Inferior product
- Electronic shopping cart
- Search engine