This research seeks to provide an economic framework for understanding two major forms of e-marketplaces: aggregation-oriented vs. exchange-oriented e-marketplaces. By analyzing the marginal benefit per transaction in alternative models, we are able to determine the most suitable B2B e-marketplace for a wide variety of product categories, market conditions, and procurement methods. For example, when companies sell commodities in a fragmented market, the aggregation model is suitable for spot purchasing, and the exchange model works best for systematic purchasing. In addition, the effect of supplier consolidation and information technology-enabled cost reduction on model selection is discussed.
Information Systems and e-Business Management, 1(2), 213-228 10.1007/s10257-003-0005-3