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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. ...

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

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  • 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/

B2B-X Presentation B2B-X Presentation Presentation Transcript

  • B2B-Xwww.b2b-x.comSupplier ExchangeD KuruppathC Olson19 May 2012
  • Agenda • Introduction • Offerings / Value Proposition • Market size analysis • Competitors • Technology • Product Positioning • Demand Creation • Distribution Channel • Cash Flow • Market Survey Analysis • Unknowns / Risks
  • IntroductionB2BX– Fitting the puzzle togetherB2B-X is a cloud based Web 2.0compatible B2B portal allowingbusinesses to interact with theirsuppliers and also trade with themin a secure and reliableenvironment.This product encapsulates astandard order managementsystem which could be customizedper business and integrated withtheir existing IT infrastructure.
  • Offerings/Value PropositionsSUPPLIERS (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
  • 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
  • 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.
  • 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
  • CompetitorsAlibaba.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.
  • 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.
  • 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
  • Product PositioningFor : Businesses who employ suppliers. They couldbe Manufacturers, retailers, distributors, resellers,or service providers.Who : need to focus more on their business andgetting their product(s) to the maximum numberof potential customers without the labourintensive aspect of using multiple sources.The b2bx web portal is a cloud based Web 2.0compatible B2B portal allowing businesses tointeract with their suppliers and also trade withthem in a secure and reliable environment.
  • Demand Creation• Influencers – customer references• Search engine marketing / optimization• Partners / System Integrators• Trade Association partnerships• Blogs• Communities
  • Distribution Channel• Primary channel is Web based portal• System Integrators aka SI’s / Value added resellers• OEM’s / Partners
  • 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
  • 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
  • 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
  • Market SurveyAn online market survey was designed and rolled out todifferent types of customers viz. Distributors, manufacturers,resellers and service providers. Survey Link https:// docs.google.com/spreadsheet/ccc?key=0AtrBHG6cLHukdDRZRG9MaFNUMXNNOTZIntent • to determine that a "comprehensive" B2B exchange would be of interest to potential customers.
  • 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.
  • Market Survey - ResultsResponse 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
  • Market Survey – Results AnalysisSurvey Analysis:•Distribution market is primary target market &Manufacturers being second most important target market .•Distribution market should be a target as they would sellproduct on the portal + buy produce from other vendors viathe 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
  • 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
  • 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
  • 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
  • Thank You !