e-business Models  «Prev 

Examples of Exchange Hubs

An example of an Exchange hub would include a site that combines buyers and sellers in the pulp and paper industry in a centralized forum to reduce search time and overall transaction costs for all users.

Features of an Exchange Hub

An enterprise using this model
  1. Might enable buyers and sellers to negotiate pricing and directly transact with one another through its marketplace
  2. Probably would charge its seller members a commission based on the total value of successful transactions conducted through the site
  3. Probably would not charge buyers to use its site, and might not charge sellers any subscription fees, membership fees, or listing fees

Additional Services

Additional services an enterprise following this model might provide to its members would include value-added services such as logistics and credit including:
  1. Origin-to-destination logistic quotations
  2. Credit-clearing services for credit-approved members
  3. Facilitation of the purchasing and selling of paper-industry equipment, such as converting machines
  4. Industry-specific content including job listings, industry events information, news headlines, and a resource directory

Closed User Groups

A closed user group approach relies on payment occurring outside of the Internet. In general, this approach is used when online shoppers have an account and are billed on some periodic basis for their usage and/or purchases. For example, an Microsoft subscriber has made arrangements to pay Microsoft via credit card each month for a subscription of Office 365. Any online purchases can then be appended to this regular bill. Likewise, a customer may have a private account with a vendor that offers products online such as Amazon.
The customer then logs in with his or her account ID and password, purchases items, and receives a bill at the end of the month for all activity on the account. These are both closed groups, only members are able to make purchases, and a billing relationship is already established, so that payment happens offline.
B2B exchanges often take place within a closed user group. For example, it is common for suppliers to have long-term contracts with their buyers for prices, which were previously negotiated. Supply-chain management systems can permit online ordering of needed supplies, whereas payment occurs through the normal offline billing and account management process.