Supplier Consolidation Effect

Abstract

In today's business, it is said that B2B rather than B2C is a prominent area for e-commerce. There may be several reasons for this argument. We think that in a business to business transaction the decision making behavior is based more on monetary terms than in B2C. Also the number of players involved are usually fewer in B2B case. In B2B area, there appear consolidation phenomena In the area of purchasing, many large companies consolidate together and combine their orders. By doing this, they try to have more bargaining power against the suppliers and derive a better deal. In the opposite side, the suppliers can consolidate and increase the efficiency of the total system Consolidation here means that all of the manufacturing capacities of the suppliers are controlled and optimized to minimize the total cost.