Defining traditional intermediaries for cross-industry commerce is an elusive task. Each of the VerticalNet communities is individually branded by industry. By focusing on one industrial sector at a time, each community caters to individuals with similar professional interests, giving business professional the best value for their time on the web.

Built on the foundation of content, community and commerce, VerticalNet provides its audience a variety of services including superior editorial content, an online marketplace, a career center and much more.  The traditional intermediaries for these sectors tended to be trade association conferences, and trade journals.  The following are examples of traditional intermediaries in some of the industries covered by VerticalNet:

STEEL INDUSTRY

Traditional intermediaries in the steel business are service centers.  Service centers buy steel from the producers and sell steel to the manufacturers.  Most service centers have a high cost of overhead which is then reflected in the price of steel to the manufacturers.  A major reason why service centers have a high cost in their overhead is because of their extensive inventory.  On average, steel service centers have almost 3.5 months worth of inventory in their warehouses.

Currently there are numerous online sites for trading steel.  E-STEEL is a marketplace for the exchange of steel.  E-STEEL allows steel suppliers to use the e-STEEL exchange to extend their customer base, expand their reach, and lower their transaction costs associated with marketing their product.  Another online site for trading steel is MetalSite. 

TELECOMMUNICATIONS INDUSTRY

Traditional intermediaries in the telecommunications industry include numerous companies.  Some of these are:  Arbinet Global Clearing Network, AT&T Global Clearinghouse, ITXC Corporation, and Ratexchange RTBX.

Online intermediaries are promoting the sale of bandwidth as a true commodity exchange.  For example, Ratexchange was founded as a neutral third party to manage a multilateral bandwidth exchange.  Trading through RTBX significantly reduces transaction costs by matching buyers and sellers and fulfilling transactions anonymously using industry standards for quality and payment terms

MORTGAGE INDUSTRY

Typical intermediaries in the mortgage business are the mortgage brokers.  Currently there are over 20,000 mortgage broker operations across the United States.  Mortgage brokers allow loan wholesalers to gain a national market without incurring the large expense of advertising and setting up shop across the country.  The broker works as a liaison between the borrower and the lender to create a cost effective process.  With all of these brokers it is no wonder why the mortgage industry has numerous inadequacies and is inefficient in mortgage origination.  This is because there is no one lender that can take advantage of economies of scale.  Therefore, the consumer is the one that suffers the most from the mortgage industry's inefficiencies.

Instead of e-commerce replacing the traditional intermediaries in the mortgage industry the Internet is complementing traditional intermediaries.  The conversion of the mortgage origination process to a full service e-channel will dramatically lower mortgage closing costs.  However a full shift to on-line mortgage transactions will not take place soon because of the complex aspect of mortgage financing.  The various electronic intermediaries include:

Electronic Mortgage Broker -  Some examples include: Eloan.com and Farwest Mortgage.
Electronic Loan Originators - These include:  Quickenmortgage.com and Microsoft's Homeadvisors.com.