MARKETSPACE COMPONENT

Similar to a marketplace, in a marketspace sellers and buyers exchange goods and services for money (or for other goods and services if bartering is used), but they do it electronically. A marketspace includes electronic transactions that bring about a new distribution of goods and services. The major components and players of a marketspace are customers, sellers, goods (physical or digital), infrastructure, a front end, a back end, intermediaries and other business partners, and support services. A brief description of each follows.

Customers
The tens of million of people worldwide that surf the Web are potential buyers of the goods and services offered or advertised on the Internet. These consumers are looking for bargains, customized items, collectors' items, entertainment, and more. They are in the driver's seat. They can search for detailed information, compare, bid, and sometimes negotiate. Organizations are the major consumers, accounting for over 85 percent of EC activities.

Sellers
Hundreds of thousands of storefronts are on the Web, advertising and offering millions of items. Every day it is possible to find new offerings of products and services. Sellers can sell direct from their Web site or from a-marketplaces.

Products
One of the major differences between the marketplace and the marketspace is the possible of digitization of products and services in a marketspace. Although both types of markets can sell physical products, the marketspace also can sell digital products, which are goods that can be transformed to digital format and delivered over the Internet. In addition to digitization of software and music, it is possible to digitize dozens of other products and services. In digitization, most of the costs are fixed and the variable cost is very small. Thus, profit will increase very rapidly as volume increase once the fixed costs are paid for. This is one of the major potentials of electronic markets.

Infrastructure
An electronic market infrastructure includes hardware, software and networks.

Front end
Customers interact with a marketspace via a front end. The business processes in the front end include the seller's portal, electronic catalogs, a shopping cart, a search engine and a payment gateway.

Back end
All the activities that are related to order aggregation and fullfillment, inventory management, purchasing from suppliers, payment processing, packaging and delivery are done in what is termed the back end of the business.

Intermediaries
In marketing, an intermediary typically is a third party that operates between sellers and buyers. Intermediaries of all kinds offer their services on the Web. Online intermediaries create and manage the online markets (such as in the NTE case). They help match buyers and sellers, provide some infrastructure services, and help customers and/or sellers to institute and complete transactions. Most ot these online intermediaries are computized systems

Other business partners
In addition to intermediaries, there are several types of partners, such as shippers, that collaborate on the Internet, mostly along the supply chain.

Support services
Many different support services are available, ranging from certification and trust services, which ensure security, to knowledge providers. These service are created to address implementation issues.