Online Purchasing Platform for O&G
The O&G industry is notable for its high barriers of entry within nearly every sub-sector, including drilling, supplying equipment and mechanical check-ups.
Some of the most prominent reasons for this are high start-up costs, strict governmental regulations that may vary to a large extent from country to country and the dominance of existing key players within the field (such as Big Oil). Another factor that absolutely contributes to this end is the existing relationships between companies which make it hard for start-ups to form a network.
For the above reasons, many companies also struggle to have concrete control over the process of selling their goods to other companies as well as the prices for their products and services. This is the problem that Ritchie Bros., an American global asset management company, is aiming to solve with their new platform: Marketplace-E.
The idea behind Marketplace-E is to create a multi-dimensional platform where suppliers of various assets, including equipment, have increased control over the price, location and timing of sales. Companies who will sell through Marketplace-E will also benefit from Ritchie Bros.’ ambitious marketing, all of the website tools and a global buyer network. Sales options on the website include fixed price, negotiated offers and auctions (with a reserve price option).
Looking at the whole picture, Marketplace-E is also facilitating the procurement process for client companies by acting as a one-stop shop to cover a wide range of requirements. Ritchie Bros. also has a long history of working as an industrial online auction house in a number of sectors, contributing to their expertise of connecting buyers and sellers, known as IronPlanet.
Rather than a physical mediator, the platform is a heavy push of digital and particularly online-lead purchasing behaviour. Despite the initial adjustment period companies will go through, Ritchie Bros, is, ultimately, a large company trusted by many O&G companies. As the internal portfolio of providers will expand to a large variety, the platform will attract more buyers. Simultaneously, we predict that where the first point of contact will be with suppliers these companies already know, eventually they will grow to look beyond the status quo.
Overall, Dashboard evaluates Marketplace-E to be a success after an initial period of hesitancy. We imagine this tool will be an efficient middleman in connecting companies purchasing and providing a multitude of goods. The platform will also hopefully be a way for smaller companies to enter the industry and compete with established players who might not be the best fit for the buying companies, whether it be for price, quality or overall compatibility. Hence, the platform considers both buyers and sellers’ interests.