The latest of these companies, Demandline.com Inc., this week will make its business-to-business marketplace site widely available to businesses with 100 or fewer employees. Businesses using the site can receive discounts on goods and services by purchasing them in volume through alliances with other small companies that want the same products. A pool of businesses can post information for vendors online regarding what the pool says is a reasonable price for a product or service. After a bidding process, the pool selects the vendor offering the best value.

Grant Johnson, president of Benevolent Capital, a money-management firm in Providence, R.I., says using Demandline.com let him lower his long-distance telephone services rate by 50% through a deal with Cable & Wireless plc. "I'm looking forward to utilizing Demandline.com for everything from insurance policies and payroll-processing services to purchasing office equipment and booking travel accommodations," he says.

Demandline.com and similar sites are typically free to small businesses; they earn revenue via commissions from goods that vendors sell online. The emergence of these sites is expected to benefit small companies, says Andy Bose, CEO of Internet research at Access Media International-USA, a research and consulting firm. "It's very difficult for smaller companies to aggregate demand," he says. "Companies like Demandline. com are helping them do just that by collectively building demand via the pooling of merchants."

Some sites that have emerged recently focus on helping small and midsize companies find the best prices on goods by expanding the pool of bidding vendors, but not necessarily through a pooled purchase. One such company, BuyerZone.com Inc., which was launched last month, calls itself a business-to-business portal.

Steffen Wood, senior administrative assistant for Castle Systems Inc., an industrial supplier in Arlington, Va., used BuyerZone.com's portal to purchase a postage meter for his company. Wood says he was able to get three bids on postage meters by using BuyerZone.com, adding,

"It was a more efficient and convenient way to purchase office supplies online."