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17 Aug 2000

Dr.Ecommerce, I wonder if you can explain how an so called electronic market place works (e-mall)...please ?

Thank you for your time,

Alex

Dear Alex:

An electronic market place is a lot like a real market place - hence the name. Basically, it is a means of bringing buyers and sellers together in a single virtual location in order to facilitate buying and selling.

In the case of an electronic mall as you mention, the purpose is often to provide small vendors with e-services that enable them to sell on line. These services include web space, tools to develop an online shop, secure transaction systems, marketing, etc. For a small company with little online experience, these services could be prohibitively expensive. However, the electronic marketplace offers economies of scale and the cost to each seller is typically very low.

It is in the business to business world, however, that electronic marketplaces most resemble their real-world versions. Typically, a marketplace will focus on a particular sector, such as electronic parts. Buyers can post their requirements and/or sellers can post their offers. This allows corporate buyers to locate the best deal and enables smaller suppliers to reach a wider market than they could in the past.

Online auction sites, of which eBay is the most well known, are another form of electronic market place.

Finally, if you enter the term "electronic marketplace" in any of the search engines, you will find lots of examples.

All the best,

Dr. Ecommerce