Most of the material in this summary comes from the Bear Stearns report, unless specified as contributions of Goldman Sachs or BancBoston Robertson Stephens. Net markets, Bear Stearns argues, will have difficulty replicating their approach across industries. The supply chain problems and solutions needed vary between different industries, necessitating industry-specific solutions.
Net markets draw buyers and sellers because of better prices and lower process costs.
Initially, improvements may be transaction-based, but as the marketplace gains participation, its value will be based on the liquidity it creates. Liquidity is likely to be highest on exchanges, second highest on auctions and lowest in multivendor catalogs because activity is more exclusive on exchanges and auctions, resulting in more rapid consolidation. Catalog aggregators will face more competition than exchanges and auctions, resulting in lower margins and valuations. Exchanges can provide a single marketplace that facilitates transactions among all the buyers and sellers within an industry. Where Net markets work Large market size.