The impact of e-marketplaces on buyer–supplier relationships: a cross industry perspective of the "move to the middle" hypothesis

Interest in, and the use of, electronic marketplaces, if less than at the height of the dot.com boom, appears to be enduring, and is therefore an important area for continuing academic study. Electronic marketplaces were heralded as allowing buyers to find new suppliers more easily, compare their offerings and if appropriate switch between them. However, sellers have proved reluctant to participate in marketplaces where they perceive the over-riding criterion for comparison with competitors is that of price, contributing to the failure of a number of marketplaces. This study seeks to explore the impact of electronic marketplaces on the relationship between buyers and suppliers. In particular, it seeks to determine if the "move to the middle" hypothesis put forward by Clemons et al. will be supported in this domain. Case studies of buying organisations, in four distinct industries, that are participating in electronic marketplaces were undertaken. It was found that the adoption of electronic marketplaces has led to a reduction in supplier numbers and to the deepening of relationships with them. Rather than replace human relationships, the establishment of electronic communications between organisations has resulted in increased person-to-person communication. The findings of this study suggest that electronic marketplaces can form an important part of an IT enabled supplier relationship management strategy.