Suppliers and manufacturers of electrical components and data cabling have banded together in the development of another vertical industry exchange that is expected to result in significant savings for the sparky.
Tagged "E-Hub", the exchange has attracted the support of over 90 per cent of electrical component and data cabling merchants and 50 per cent of manufacturers by industry volume, as well as key employer organisation National Electrical Components Association (NECA).
E-Hub offers merchants and manufacturers three core services: a trading exchange for the automation of ordering, fulfillment, payment and reconciliation between trading partners; an electronic catalogue for industry product information and pricing; and an industry portal for information and consulting services.
The project was handled by Pacific Commerce, which had similar success in the healthcare vertical, and took about seven months to develop. Pacific Commerce's initial role was to bring together manufacturers and more than 750 wholesale outlets to form the exchange, then provide e-commerce infrastructure and consulting services.
Pacific Commerce marketing director Colin Kempter expects the exchange to handle a significant portion of the $6.5 billion worth of purchasing in the industry each year, and expects 30 million business documents to be exchanged through E-hub on a yearly basis. Pacific Commerce will gain revenues from the professional services it offers the participants, as well as subscription (catalogue) revenues and transaction (trading hub) revenues.
Kempter suggests the industry-wide support Pacific Commerce received for both its health and electrical/data cabling hubs is proof vertical exchanges are much more effective in serving the needs of its participants than large horizontal hubs such as the likes of corProcure and Cyberlynx.
"If you're doing a hub that does nothing but pens and pencils, you're not going to survive," he said. "We fundamentally focus on the supply chain, this isn't just a Web browser page where you can look at things."
In order to get a better feel for both the industries for which Pacific Commerce has developed exchanges; the company has hired people out of the particular industry to "have the expertise on staff".
"The business environment is so different from vertical industry to vertical industry," Kempter said. "Horizontal players don't know the industries they serve well enough and can't provide the services an industry needs. If people out there think they have one broad reaching solution that suits everybody, I'd love to hear from them."