B2B-Xwww.b2b-x.comSupplier ExchangeD KuruppathC Olson19 May 2012
Agenda •   Introduction •   Offerings / Value Proposition •   Market size analysis •   Competitors •   Technology •   Prod...
IntroductionB2BX– Fitting the puzzle togetherB2B-X is a cloud based Web 2.0compatible B2B portal allowingbusinesses to int...
Offerings/Value PropositionsSUPPLIERS (distributors, resellers, service providers)Subscription based service that includes...
Offerings/Value Propositions …BUSINESSESSubscription    based service that includes –       Maintaining a list of all th...
Offerings…•   Businesses can directly place, manage and track orders through b2b-x    portal.•   Available options:       ...
Market size Analysis   Total Market Size (Universe of all the possible customers)               All businesses who deal ...
CompetitorsAlibaba.comProfile           Chinese company - HK listed           Largest online B2B e-commerce website    ...
Competitors…Manta.comProfile        Chinese company behaving more like a company profiles         directoryB2B-X   Diff...
Technology Cloud based / Web portal – http://www.b2b-x.com/     Manages  businesses / suppliers profiles     Business s...
Product PositioningFor : Businesses who employ suppliers. They couldbe Manufacturers, retailers, distributors, resellers,o...
Demand Creation•   Influencers – customer references•   Search engine marketing / optimization•   Partners / System Integr...
Distribution Channel•   Primary channel is Web based portal•   System Integrators aka SI’s / Value added resellers•   OEM’...
Cash Flow - Costs•   Initial Costs: $5 million - $8 million      •   Resources (IT team; UI/Web design team; Management   ...
Cash Flow - Revenue•   Revenue      •    Transaction fees: 0.5 to 2% per transaction          Transactions Value      Comm...
Cash Flow – Revenue…•   As per one of the statistics:       • average B2B transaction value is $75,000 (         http://ww...
Market SurveyAn online market survey was designed and rolled out todifferent types of customers viz. Distributors, manufac...
Market Survey …Our survey gathered information about -   • respondent, in general terms,   • any history of online B2B use...
Market Survey - ResultsResponse Statistics :    •   Sent to roughly 45 people    •   Received 18 respondents - 40% respons...
Market Survey – Results AnalysisSurvey Analysis:•Distribution market is primary target market &Manufacturers being second ...
Market Survey – Results Analysis…•   Ratings of Price, Shipping Costs, Support, and Availability showed     •  Price is mo...
Looking back - Survey Issues•   The survey was a tiny fraction of the potential market size and may    not represent the v...
Unknowns / Risks•   Legal issues around taking orders and    fulfilling them.         •   Costs around these would be pass...
Thank You !
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B2B-X Presentation

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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.

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

    1. 1. B2B-Xwww.b2b-x.comSupplier ExchangeD KuruppathC Olson19 May 2012
    2. 2. Agenda • Introduction • Offerings / Value Proposition • Market size analysis • Competitors • Technology • Product Positioning • Demand Creation • Distribution Channel • Cash Flow • Market Survey Analysis • Unknowns / Risks
    3. 3. 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.
    4. 4. 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
    5. 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. 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. 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. 8. 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.
    9. 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. 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. 11. 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.
    12. 12. Demand Creation• Influencers – customer references• Search engine marketing / optimization• Partners / System Integrators• Trade Association partnerships• Blogs• Communities
    13. 13. Distribution Channel• Primary channel is Web based portal• System Integrators aka SI’s / Value added resellers• OEM’s / Partners
    14. 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. 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. 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. 17. 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.
    18. 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. 19. 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
    20. 20. 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
    21. 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. 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. 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
    24. 24. Thank You !

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