Business-to-Business E-Commerce

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So far, the e-commerce I have mentioned is business-to-consumer, or B2C, ecommerce. This kind of e-commerce gets the attention of the popular press. When we hear about Amazon.com's problem of warehousing their previously virtual inventory, we are hearing about the new problems of B2C e-commerce. When we hear about eBay's overloaded servers shutting down when people come home from work, we are hearing about the vast potential and pent-up demand of B2C e-commerce.

But that's only part of the e-commerce story. There's also all the invisible commerce going on between the companies that make the products sold on the Web. Think about a simple ink pen. When you buy a pen from an online retailer, a single transaction is involved. If the retailer wants to save transaction costs, the retailer could make the transaction more efficient by using appropriate technologies. Let's say the online retailer shaved two cents off the cost of the transaction. That savings is respectable, but it's only a couple of pennies toward the bottom line of the pen sale.

On the other hand, it took hundreds of transactions to build the pen. The pen manufacturer had to buy steel and ink and springs and dozens of other raw materials from manufacturers. Then the pen maker had to buy production services, marketing services, and management services. Each one of these transactions has a cost. If the manufacturer of the pen could shave a couple of pennies off each transaction between its partners, all of that savings would go to the bottom line.

In this book, I will focus on this business-to-business (B2B) e-commerce, and how you can use the eXtensible Markup Language (XML) to lower transaction costs. There are a number of initiatives happening in several industries today. I'd like to mention some of these and focus on one in particular, BizTalk, so that you can see how a typical B2B transaction might work.