And even critics acknowledge that the benefits of the B2Bs outweigh the possible drawbacks. Like any new market, online exchanges present challenges to industry. The exchanges are susceptible to price-fixing by suppliers fearful that prices might fall too low. And, like all companies doing online auctioning, the exchanges could be prone to criminal activity such as collusion. Some also fear that some small and midsize suppliers and buyers could be excluded from online exchanges.
Experts say such fears are overblown, however.
But it's the exchanges' positive impact that would likely show up in economic growth. Highly fragmented industries that lack dominant players, exhibit sharp swings in supply and demand, and have multiple distribution steps are perfectly suited for trading their products online, says Forrester analyst Matthew Sanders. For example, the agriculture industry's production varies from year to year due to shifts in weather and natural disasters. Products that are standardized, perishable, and traded in high volume at low prices are also likely to succeed in the electronic marketplace, says Sanders. Thus, petrochemicals used in plastics, soaps, and detergents, plus flowers, electricity, and food, are perfectly suited to e-exchanges.