An online intermediary that connects fragmented buyers and sellers. Net markets eliminate inefficiencies by aggregating offerings from many sellers or by matching buyers and sellers in an exchange or auction. For buyers, they lower purchase costs while reaching new suppliers. For suppliers, they lower sales costs and reach new customers. A central hub where a trusted intermediary integrates both procedures and technology can save costs.
Net markets operate on several different models.
A company creating an Internet market to match buyers and sellers. Network Effect Describes how all buyers and sellers benefit when a new market participant is added. The network effect produces a cycle with more buyers attracting more sellers and more sellers attracting more buyers. Robert Metcalfe created the notion that the value of a network grows by the square of the number of participants. To create a consistent set of terms and product descriptions, often using industry-specific translation software.