Those partners are left with the task of determining which online trading efforts are most viable and deservingof their time and investment. As a supplier of automotive exterior trim and fuel systems, Textron has been solicited by Ford, General Motors, and DaimlerChrysler to sell its wares on Covisint, an E-marketplace being developed by the three automakers and scheduled to go live later this year. But with nearly 1,000 online trading exchanges competing for transactions, Textron is trying to determine how the E-marketplace frenzy will play out before it proceeds. In addition to investing time and resources, the manufacturer is also trying to determine exactly how trading on an exchange will impact its business. Whether led by an independent startup or a consortium of industry players, marketplaces introduce a new set of virtual intermediaries into what was once the strict domain of distributors, creating a potential conflict.
Businesses say distributors are one of the most influential factors in their E-business strategies.
Exchanges also redefine trading relationships, sometimes turning what was once a cutthroat competitor into a partner in a collaborative purchasing pool. While predictions abound about the ultimate impact of these virtual bazaars, no one's really certain yet where all the E-marketplace hype is going. Perhaps their greatest impact so far is to get companies thinking about how to transform trading relationships through Web channels. Some manufacturers use extranets to streamline their selling channels. 3M Co. in St. Paul, Minn., is working to improve communication with customers and distributors by building nearly 150 extranets.