Dell has jumped on the business-to-business exchange bandwagon with the launch of an online trading site aimed at small to medium-sized businesses.
Dell Marketplace will connect together buyers and sellers of hardware, software, office supplies and industrial goods across horizontal markets.
The site will operate as an extension of a strategic relationship between Dell and online trading infrastructure developer Ariba. Dell Marketplace, which will also link to other online exchanges, will be based on Microsoft Windows. Internet services company Lante will host vendor catalogues and so-called showrooms, while Exterprise will provide hosted e-procurement services.
The suppliers that will take part in Dell Marketplace include Motorola and office supplies companies 3M and Pitney Bowes. The exchange is expected to go live later next month.
John Hampton, director of Dell's new ventures group, said: "For the suppliers, the appeal is that Dell conducts a substantial amount of business online. For the buyer, the exchange will provide better pricing, qualified suppliers and quick customer response time."
Hampton said Dell will gain revenue through value-added services such as providing integrating and hosting services. The company will collect a transaction fee for each purchase made on the site and the size of the fee will vary by product.
"Customers and suppliers don't want to pay tolls forever," said Hampton, adding that the transaction fee will be phased out over time. He did not provide any further details.
Hampton declined to disclose the amount of revenue Dell expects the marketplace to generate nor the amount Dell has invested in the project. The company plans to target its present customer base and is also looking to incorporate many of its current business partners in the venture.
Analysts are divided about how successful e-marketplaces will be. According to Forrester Research, trading of goods online will reach $2.7tn in 2004, and 53 per cent of that will flow through e-marketplaces. However, a recent study by IDC found that predictions of thousands of e-marketplaces are grossly exaggerated. The researcher predicts that the market will see only a few hundred because many will not launch, will collapse or be combined.
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