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. For instance, customers linked into an extranet can configure and order brand graphics for product packaging over the Web from 3M. Snap-on Inc. is similarly focused on improving electronic connections to distributors and customers. The Kenosha, Wis., toolmaker is setting up an extranet that will make it easier for distributors to order products, check inventory and order status, and view promotions. By early next year, Snap-on plans to set up 6,000 hosted Web portals that will let distributors extend online ordering to their customers. Managing the brand on some of these sell sites is a real issue.