Last week, it was the $US400 billion lumber industry. Just 60 days ago, ChemConnect's worldwide chemical exchange was launched. Already it has 2,500 traders and $25 million in goods listed on its site.
A huge e-commerce story is taking shape on the business-to-business front, where revenue is expected to soar from $109 billion this year to $1.3 trillion by 2003, according to Varda Lief, an analyst at Forrester Research I in Cambridge, Massachusetts.
But beyond being a great place to match buyers and sellers to get a good price, companies shouldn't look to the fast-growing sprawl of digital marketplaces for any broad gains in efficiency -- at least not yet.
In recent weeks, more than a half-dozen new online industry auctions and trading exchanges were launched, including e-Wood (http://www.e-wood.com) for lumber and building materials and Scana Resources Inc.'s Scana Online (http://www.scanaonline.com), an online gas and electricity auction.
Meanwhile, business at already established digital marketplaces is booming.
In the $300 billion energy market, for example, electricity traders are executing $12 billion per year in transactions at Houston-based Altra Energy Technology Inc.'s 3-year-old Web site, http://www.altranet.com.
All of these digital bazaars match worldwide buyers and sellers, many of whom previously conducted business exclusively via phone calls and long-term personal relationships with suppliers.
Beyond that, however, many of the same inefficiencies -- such as getting order confirmations and tracking shipments -- that now plague suppliers, manufacturers and other supply-chain partners remain unchanged. The reason is that most business-to-business Web sites remain stand-alone exchanges at which orders can be placed but not easily integrated back into buyers' and sellers' corporate systems.
For instance, Cleveland-based Olympic Steelregularly goes online to http://www.metalsite.com to buy raw materials.
"But everything after that happens off-line," said Frank Ruane, director of corporate purchasing. For instance, there are no confirmations of orders over the Internet. "We conclude the transactions online, then we go back to the old way of doing business," which means back to the fax machine and telephone, Ruane said.
Beyond getting a better price, "I don't think I get many efficiencies. From a business-to-business standpoint, the technology is just not as advanced as something like Amazon.com," he said.
To get over this hurdle, digital marketplaces have no choice but to get into the systems integration business, according to Scott Latham, an analyst at AMR Research Inc. in Boston.
"Right now is the beginning stage. The real-time information and ability to match suppliers and buyers is fabulous, "Latham said. "But these vertical marketplaces will need specific systems integrators who are familiar with their industries."
For example, "if General Motors decides to press 10 percent of its steel needs through a Web site, that Web site is going to have to support (the auto industry's) ANX (data exchange) standards,"Latham said.
One digital marketplace working on such services is New York-based e-Steel Corp. (http://www.esteel.com). The company has partnered with El Segundo, California-based Computer Sciences Corp. to integrate buyers' accounts payable systems and sellers' inventory systems directly with e-Steel's marketplace system.
Now e-Steel receives separate data files with updated inventory and payment information from sellers and buyers.
"Under phase two, we'll be further integrating directly to users' (enterprise resource planning) systems," said Jeffrey Czarniak, e-Steel's vice president of product development.
"We want to make transactions truly seamless, such that a seller's inventory system would automatically update (its offerings) on the e-Steel site," he said.