Free Markets OnLine, an independent venture based on the TPN system, contracts with buyers to create reverse-auction markets for large purchase orders. Several small companies, such as Ariba Technologies, Commerce One and Trilogy, have developed procurement software that features similar capabilities. Using a Web-based model, purchasing managers can access the system through the corporate Intranet. Buyers are able to automate the procurement process and receive the lowest price possible from suppliers. Companies can also build value for themselves by allowing consumers to prescribe pricing terms to their advantage.
Suppliers can then decide if they are willing to accept the buyer s terms.
Another example of increasing buyer leverage is the growth in intelligent shopping agents. Customers can easily and quickly compare the price of a product across different on-line vendors using the Internet. In the physical world, comparison shopping can be difficult and time consuming. Through applications such as reverse-bid systems and intelligent shopping agents, consumers in the new economy will gain bargaining power and will be able to reduce producer surplus levels. The new economy requires new thinking by business managers.