B2B-X is a cloud based Web 2.0 compatible B2B portal allowing businesses to interact with their suppliers and also trade with them in a secure and reliable environment.
This product encapsulates a standard order management system which could be customized per business and integrated with their existing IT infrastructure.
The presentation for the same can be viewed @ http://www.youtube.com/watch?v=yNXCokXXOPo
3. Introduction
B2BX– Fitting the puzzle together
B2B-X is a cloud based Web 2.0
compatible B2B portal allowing
businesses to interact with their
suppliers and also trade with them
in a secure and reliable
environment.
This product encapsulates a
standard order management
system which could be customized
per business and integrated with
their existing IT infrastructure.
4. Offerings/Value Propositions
SUPPLIERS (distributors, resellers, service providers)
Subscription based service that includes:
Adding products/services to the portal
Access to a worldwide customer base
Premium Suppliers can promote themselves over "non-premium"
suppliers in listings in addition to making their contact information
public for direct contact with Businesses
5. Offerings/Value Propositions …
BUSINESSES
Subscription based service that includes –
Maintaining a list of all the suppliers that the businesses
currently engage with
Searching for new suppliers in the market offering
similar/parallel services, enquiring about their cost
Comparison feature of current supplier for a given service/
product with similar competitors
Maintain a list of preferred suppliers/potential suppliers so
as to be able to contact them in case of emergency, peak
times, or lack of supply
Premium Businesses – can get to supplier information
directly and bypass portal for making orders as well as
receive discounts on other services
6. Offerings…
• Businesses can directly place, manage and track orders through b2b-x
portal.
• Available options:
• Option 1 : A default order management system to be driven by manual
user entry
• Most suited for: small businesses to place online orders, make / receive payments
through PayPal / Visa and track their orders.
• Option 2: Initial involvement with Portal >
Configure a cloud based order management
system (with required business
customizations.)
• Most suited for: Professional and bigger businesses
having IT established IT infrastructure
• They could also engage 3rd party System
integrators / vendors for these customizations.
7. Market size Analysis
Total Market Size (Universe of all the possible customers)
All businesses who deal with suppliers
Example:
Metals Industry worldwide : 400 Billion $ in
1997 (
reference: International Metal workers federation)
Electronics Industry world : 1.254 trillion Euros
in 2008 (Reference:
Electronics market forecast and industry trends 2007-2012
)
Served Market Size (Customers reachable by channels
identified)
• Metals - $11.0 billion USD (reference :
http://www.researchandmarkets.com/reportinfo.asp?report_id=471256&t=e
)
• Electronics - $5 Billion USD – India (
http://www.isaonline.org/microsites/visionsumit/12/Presentation/VS2012_PNDhoot.pdf
)
Target Market Size (Most potential customers who could buy
this)
1% of the Served market size
8. Competitors
Alibaba.com
Profile
Chinese company - HK listed
Largest online B2B e-commerce website
35 million users
Membership Fee: $5000 and $8000 for Chinese Suppliers
Multilingual – localized
Pros
Well known in the market
Open to all
B2B-X Differentiator
Comprehensive order management system.
Implement order management system for the business.
9. Competitors…
Manta.com
Profile
Chinese company behaving more like a company profiles
directory
B2B-X Differentiator
Comprehensive order management system.
Implement order management system for the business.
Made-in-China.com
Profile
Manufacturer directory and doesn’t include directories for
other supplies, distributors etc.
Mostly China focussed
B2B-X Differentiator
No focus on the geography of the manufacturers and all
can participate
Comprehensive order management system.
Implement order management system for the business.
10. Technology
Cloud based / Web portal –
http://www.b2b-x.com/
Manages businesses / suppliers profiles
Business specific - Suppliers list including
Current suppliers
Potential suppliers
Business specific - Suppliers list for business
specific products
Communicate with suppliers in / out of portal
User specific - transactions / orders for every
customers
Standard implemented solution - customizable
based on per customer
Backend
Database based repository
EDI module
Flat file handling module
Web-services based integration API available to
enable integrated with other systems in
enterprise
Auditing and Archiving
11. Product Positioning
For : Businesses who employ suppliers. They could
be Manufacturers, retailers, distributors, resellers,
or service providers.
Who : need to focus more on their business and
getting their product(s) to the maximum number
of potential customers without the labour
intensive aspect of using multiple sources.
The b2bx web portal is a cloud based Web 2.0
compatible B2B portal allowing businesses to
interact with their suppliers and also trade with
them in a secure and reliable environment.
13. Distribution Channel
• Primary channel is Web based portal
• System Integrators aka SI’s / Value added resellers
• OEM’s / Partners
14. Cash Flow - Costs
• Initial Costs: $5 million - $8 million
• Resources (IT team; UI/Web design team; Management
Team ; Sales team; Legal consultation; 3rd party
agreements)
• IT Infrastructure to host cloud based infrastructure
• Development and Maintenance of portal
• Customer acquisition costs = ~$451.67 per
customer
• 200 customer/month for 1 year $ 1.1 Million
15. Cash Flow - Revenue
• Revenue
• Transaction fees: 0.5 to 2% per transaction
Transactions Value Commission rate Average Revenue
>20000 USD 0.50% 100.00
10000-20000 USD 1.00% 150.00
5000-10000 USD 1.50% 112.50
0-5000 USD 2.00% 50.00
• Minimum amounts:
Avg worth Revenue as
No: txns per txn commission per year
200 20000 20,000.00
1000 15000 150,000.00
4000 5000 450,000.00
10000 2500 500,000.00
Total 1,120,000.00
16. Cash Flow – Revenue…
• As per one of the statistics:
• average B2B transaction value is $75,000 (
http://www.informit.com/articles/article.aspx?p=20999)
• Assuming 2400 Customers x 10 transactions per year x $
75000 x average 1.75% transaction fee = $ 31.5 Million
• Supplier and Business Subscriptions:
@ $15/month and 2400 Subscriptions
= $36,000 year 1
17. Market Survey
An online market survey was designed and rolled out to
different types of customers viz. Distributors, manufacturers,
resellers and service providers.
Survey Link https://
docs.google.com/spreadsheet/ccc?key=0AtrBHG6cLHukdDRZRG9MaFNUMXNNOTZ
Intent
• to determine that a
"comprehensive" B2B
exchange would be of interest
to potential customers.
18. Market Survey …
Our survey gathered information about -
• respondent, in general terms,
• any history of online B2B use, vendor consolidation
• willingness to look into online B2B commerce
• willingness to pay for an online service.
Also
• to determine interest in future features of a B2B exchange.
19. Market Survey - Results
Response Statistics :
• Sent to roughly 45 people
• Received 18 respondents - 40% response rate (much
higher than traditional response rates)
Survey Results Highlights
• Manufacturers and Distributors dominated the responses
• Business size leaned towards a small business classification
• The issue of consolidating vendors was evenly split
between Yes and No
• The majority of respondents utilize ecommerce in their
annual spend
• The majority of respondents indicated they are willing to
use a 3rd Party to access more customers/vendors as well
as allowing a 3rd party to assist in the transaction process
• The results also showed a willingness to pay a subscription
fee for use of an online service
20. Market Survey – Results Analysis
Survey Analysis:
•Distribution market is primary target market &
Manufacturers being second most important target market .
•Distribution market should be a target as they would sell
product on the portal + buy produce from other vendors via
the portal.
•Most respondents - were small businesses
• 100 or less employees and 50 or less vendors
•Mobile applications - currently not a requirement
• Important a potential feature for future revisions
21. Market Survey – Results Analysis…
• Ratings of Price, Shipping Costs, Support, and Availability showed
• Price is most important in Selling
• Availability is most important in Purchasing
• These results to be used to determine an algorithm for a
Vendor Rating system within the commerce system
• Average Subscription fee approximately $15/month most popular
option
• Access to more customers/vendors was the primary response for
using a 3rd party
22. Looking back - Survey Issues
• The survey was a tiny fraction of the potential market size and may
not represent the views of the entire Target Market.
• A few respondents did not answer all the questions
• A few respondents did not properly rate categories in the Purchasing/
Selling area
• The business types may have been skewed in the
Manufacturer/Distributor types
• The survey could have been a bit more comprehensive
23. Unknowns / Risks
• Legal issues around taking orders and
fulfilling them.
• Costs around these would be passed over to
the businesses
• Optional Escrow services – who offers
them and what is involved in these.
• Costs around these would be passed over to
the businesses
Businesses might be using both Alibaba and a local Order management system for themselves with repetitive entries IT / Services team in the background to customize and i
Trade Association partnerships – Electronic industry associations
http://findarticles.com/p/articles/mi_m0DTI/is_11_28/ai_67936365/ WineryExchange.com startup costs were $3 million - $5 million http://www.panalysis.com/resources/customer-acquisition-cost.aspx [(Website Development Costs / Expected Life of website) + Monthly Promotion Costs + Monthly Maintenance Costs] / New customers [($5,000,000/60 months) + $5,000 + $2,000]/200 New customers/month = $451.67 per customer Good Article on customer acquisition costs, etc: http://www.forentrepreneurs.com/startup-killer/