These hubs aggregate large amounts of diverse product information from a variety of vendors and offer them for electronic purchase. Additionally, many of these hubs serve as a means to auction excess inventory and under par materials. A hub is essentially a virtual village in which companies mingle with other buyers and sellers in one place. Understanding the trend and positioning accordingly, companies will save expenses and remain competitive. By integrating sourcing, purchasing, and billing for users, hubs dramatically reduce the cost of acquiring business goods and services.
Companies can better manage capacity utilization, increase inventory turns and optimize cash flow.
Further, the time efficiencies inherent in such a process will enable businesses to devote more time to strategic procurement issues. If a company's profits are going down, they might be inclined to cut customer service, but when you can get dollar for dollar savings in procurement through the Internet, you can keep your profits at an acceptable level. If you feel your business is currently behind the e-commerce eight ball, I urge you to take time to evaluate such a procurement strategy sooner rather than later, as the wave is moving at lightning speed and successful companies of the next decade will be formed by the technology of today. He has instructed several financial and management courses for the Oswego County Micro-enterprise program.