Net Markets: So How's It Going?

Time flies when you're in a revolution. But how are Net markets really performing?


More important, however, are fears that their competitive advantage may be eroded. Constantly being forced to lower prices on products to win business from other suppliers has proved to be a less-than attractive proposition for some suppliers. "They watch business going to the lowest bidder and they think, 'Maybe I don't want to be a faceless supplier,'" says Yockelson. Consider this: One buyer of a Net market linking purchasers and suppliers of food has seen beef suppliers balk at the prospect of potentially quoting a price to a regular customer, and then being forced to post a lower figure online only to have that same client subscribe to the Net market, see the lower price and wonder why he didn't get quoted it in the first place.

Not all suppliers share this fear, however. Dawn Grabinski, comptroller of Blachowske Truck Line, a Fairmont, Minn., trucking company moving dry bulk, was invited to bid one time on Freemarket.com - and hopes to be called again. "It would give us access to business we would be unaware of otherwise," she says. And, analysts predict as Net markets add more features -- posting information like product reliability or handling escrow management -- suppliers may feel more able to differentiate themselves from the competition and see more benefits to participation.

Ultimately, for many buyers and sellers alike, participation in Net markets is more of a way to get their feet wet than anything else -- at least for now. "We believe this is the way of things to come," says Telik's Scott. "And we're better off getting in early." Even buyers with mixed reactions, like Western Family Food's Kraner, echo that sentiment: "This is the wave of the future and we're going to stick with it," he says.

And that, of course, is the key lesson. For people on both sides of the transaction, the experience of using an electronic marketplace is a work in progress and a highly experimental one, at that. There's lots of potential, and lots of work to be done. But there's no stopping it now.

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