Article at a glance:

B2 Basics

Business-to-business (B2B) electronic marketplaces are brilliant at reducing transaction costs and removing inefficiencies from the supply chain. But they have been less thoughtful when it comes to capturing value for themselves. To induce major buyers to join before they affiliate with any other marketplace (or, alternatively, before starting a buyer-led one) B2Bs have been charging little or nothing for access and even offering buyers equity stakes. B2Bs—pressured by suppliers, beholden to buyers, and with little income of their own—are being painfully squeezed. Can they ever build solid, profitable businesses?

The take-away

McKinsey's study of 23 leading marketplaces found that many B2Bs could be profitable—but only if they grasp the full value of what they offer and find the right ways to charge for it.