From: Business To: Business

Marketplace Turbulence

Get ready to hold on, though. The sailing for early entrants won't be entirely smooth. In key respects, the bar may be higher in b2b e-commerce than it is in b2c. Case in point: "To succeed in this [arena], you'll need deep domain knowledge," says John Sviokla, a vice chairman with Chicago e-commerce consulting firm Diamond Technology Partners Inc. In other words, to successfully peddle peaches to consumers, you don't have to know much about farming, but to build an exchange for farmers, you've got to grasp the fundamental drivers in the industry.

"B2b e-commerce requires much more than technology skills," adds Sharma. "You have to really understand the domain, the underlying businesses."

Another hitch: B2b involves long selling cycles, and, before big deals are nailed down, "You'll need to do face-to-face selling," says Sharma. It's one thing to buy a $10 book with a mouse click. It's an entirely different thing to buy $100,000 worth of coffee mugs.

"A Web site won't close deals for you," stresses Geer. "You can't rely on a Web site. To make b2b deals, often, you've still got to put feet on the street."

And although b2b e-commerce is expected to detonate soon, that fast growth won't hit until the future. For now, few b2b sites report profitability. But Mark Hoffman, former vice president of management and technology consulting firm Booz-Allen & Hamilton's office in San Francisco, says that's all about to change, "We're just now seeing the tip of this iceberg. Mainstream big businesses had been skeptical about the Web, but no more. They're now jumping on the Internet. We'll be seeing many successful b2b sites. There is every reason to be optimistic about this market."


Robert McGarvey is Entrepreneur's "Web Smarts" columnist.

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This article was originally published in the June 2000 print edition of Entrepreneur with the headline: From: Business To: Business.

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