Peregrine Systems a company that offers hosted data transformation tools used in business-to-business trading, this month announced a flat-rate pricing option for its Get2Connect.net e-commerce products. Peregrine joined rivals such as EC Outlook in offering flat-rate pricing based on the number of trading partners.
The new pricing structure allows companies with a growing e-commerce strategy, such as Atlanta-based Channel Link, to better plan and manage their B2B budgets.
"We're seeing a dramatic acceleration of the rate of [online trading]," says William Roth, CEO of Channel Link, an exchange for the pharmaceutical industry and a Peregrine customer. "A flat rate, in our minds, is the only way to make messaging [in B2B] affordable."
Derrick Dominique, an analyst at Hurwitz Group, expects over the next 12 to 18 months to see more e-marketplaces move beyond commodity transactionsâ€"which easily facilitate transaction feesâ€"to a more complex business model that involves value-added services. "What exchanges aren't doing right now is enabling that stronger relationship," Dominique says. "In the end, companies will buy on the exchanges at full price" if there are the surrounding services to support the trading relationships, he says. Since opening its virtual doors in April, PlasticLink.com has been a portal for the plastics industry, an informational site that survived on revenues drawn from advertising.
The business has cobbled together a consortium of about a dozen plastics companies and sometime next year plans to become an industry online trading exchange. Plastic Link is still in the process of setting up its business rules, but transaction fees apparently will be a cornerstone of its revenue plans, at least initially, officials said.
But PlasticLink also is investigating other revenue streams, including offering financing options to e-marketplace participants.
Per-transaction-based pricing is far from dead, however. Stephen George, CEO and founder of Epylon says his e-marketplace for the public education and government sector charges suppliers a single-digit transaction fee, and he doesn't see that ending any time soon. "There's been a lot of talk that you need to be an eBay-like model to make transaction fees work," George says. "But ... we are finding success. We're confident that works, and we're going to stay with it for at least the next couple of years."
