The Barriers and Benefits of the Electronic Marketplace Environment for SMEs

Although there are many initiatives to encourage SMEs online, not all have been successful. It may therefore seem premature to discuss electronic marketplaces in the context of SMEs. However, if SMEs ignore e-marketplaces a number of problems can result. E-marketplaces present a significant threat to SMEs since they increase competition and leave nonparticipants vulnerable to more e-enabled firms. This paper examines the barriers and benefits of e-marketplaces in the context of SMEs. It first addresses the nature of emarketplaces, before identifying the benefits that may be realisable by SMEs from participation. Drawing on the literature, the barriers facing smaller firms in this environment are discussed. Identification of these barriers, such as lack of standards, supply chain integration and global trading, enables a greater understanding of how SMEs can plan effective strategies to gain from e-marketplace participation.