By Prashant Mahesh
Optimistic projections expect business on B2B sites to grow ten times the size of B2C trading. The implication: retailers should buy more from wholesalers.

Many markets have traditionally been close to equilibrium. There are just enough suppliers surviving to support the retail market at any point in time. Whenever a new player enters the marketplace, this equilibrium gets disturbed leading to a change in the supplier population.

All along, existing suppliers have been somewhat protected by the reality that the new entrant had to embark on a fairly extensive marketing campaign using advertising and traveling salesmen in order to break into the market. The high cost of a start-up has been keeping many small players out.

It is here that B2B sites have a critical role to play. Selling on the Web involves low start-up costs and low overheads. For, advertising is largely carried out by the website itself by using e-mail and search engines. Therefore, the Net can have a disruptive impact on the supply chain. Traditional suppliers who fail to realise this might continue to operate in the traditional way. But, they are sure to lose marketshare to some of the nimble Net start-ups.

Brands aren’t safe
There is a fair degree of "stickiness" in the trade market. Once a relationship has been forged with a particular supplier, it takes a fair bit to move them out. For, they are accustomed to the available inventory, credit and shipping arrangements and pricing. There is a problem here: once a supplier is moved out of your supply chain to another one, it is difficult to get him back.

Also, traditionally well-established entities developed a "brand" in the marketplace which made them a "safe" place to shop. On the face of it, Internet start-ups will not have this brand name recognition and will find it hard to compete. But then this would be a very low comfort level for an existing brand.

Supply chain trends
There is another new trend emerging in the area of supply chain. Analysts expect a new trend in supply chain and they call it "virtual wholesalers". Traditional information systems are often so poor in the supply chain of so many industries that anybody who can set up and supply accurate and timely information on product types, their availability and their pricing and delivery will be welcome to the consumer side of the equation.

Hence, traditional suppliers are expected to do a fairly serious SWOT analysis on the effects of the Net over their businesses. It is almost certain that the Net will have an impact on suppliers’ business and the first ones to respond to the impact will perform better.

Traditional players in the supply chain have a tremendous advantage, provided they can break the mental deadlock that says "it works, so don’t fool with it". They continuously shut down parts of their own business by having other parts compete against themselves. It is also an opportunity to break into a new territory via the Internet, territories inaccessible through traditional means.

Website design
There is no such thing as a single ideal site for B2B business. The adage "time is money" certainly holds true for B2B. A site must allow potential consumers to "drill down" rapidly through multiple product layers. Ideally, it should allow viewing of the entire inventory management system.