FindMRO.com, another fast-growing marketplace, focuses on hard-to-find maintenance, office, and business supplies. It has a lot of costs, too, but like ChemPoint.com, it has something else that's proving key for success in the business-to-business world: a rich parent. W.W. Grainger Inc., a Lake Forrest, Ill., company with revenue of $4.5 billion in 1999, has spent more than 70 years supplying businesses with products from hydraulic pumps to garbage bags.

When FindMRO.com had to assemble a database of more than 5 million products growing by 200 items a day, it was less daunting with Grainger's experience-and its $110 million investment in FindMRO.com's catalogs and infrastructure. "We have domain expertise. We've been doing this for 73 years, and every person in my shop has at least 10 years' experience, and that's a huge competitive advantage for me," says Ron Paulson, president of FindMRO.com. "A lot of our customers have thousands of suppliers. Some customers deal with 15,000 to 30,000 suppliers, and it's $300 to manage each supplier. So if you had 17,000 suppliers, that's $500 million you'd eliminate with FindMRO," Paulson says. FindMRO .com opened about five months ago and is already doing about $50 million a year in business.

Supplymarket.com is an electronic trading floor, rather than a digital marketplace like SciQuest.com or FindMRO.com. Just like a marketplace, Supplymarket.com faces the intimidating task of building dual databases-one for clients and the other for providers. But rather than offering a place where companies can shop for specific products, Supplymarket.com acts as a forum where deals can be put together. This model embodies one of the most important possibilities of the new economy: giving smaller companies a chance to reach out to a vast universe of potential customers at a very reasonable cost.

While it may take a giant such as GE years to see a corporate transformation, Pete Vougiouklakis, president of Diewall Tool and Die Co. in Utica, Mich., can testify to the new, dramatic business opportunities marketplaces create. Getting new clients in Diewall's business can take months of effort and a great deal of in-person selling time.

For that and other reasons, business at Diewall-a small, privately held supplier of custom-made manufacturing equipment-remained flat but reasonably profitable for a number of years. Supplymarket.com changed that. "We've probably secured about three-quarters of a million dollars worth of work that we've bid on and had the bids accepted by the companies themselves who were the end users," Vougiouklakis says.

Although users are enthusiastic about Supplymarket.com and similar independent exchanges, their future depends on a lot of funding and support. As a startup launched in October, Supplymarket.com faces well-heeled competitors entering the field at a rapid pace; the expense of building and maintaining databases; and labor-intensive investments in customer-service managers.

So far, Supplymarket.com has signed on 9,000 registered suppliers and 5,000 buyers, and has grown to 140 employees. But Bill Sheehan, VP of business development at the Burlington, Mass., company, acknowledges that "we're not doing hundreds of auctions a day. This is built-to-order material. It's not a commodities exchange, but we're getting a lot of transactions," he says. Supplymarket.com gets a commission of 2% to 4% of the value of each deal it generates, depending on the size.

Many business-to-business ventures straddle the world of marketplaces and exchanges. Transplace.com, owned by J.B. Hunt Transport Services Inc., one of the nation's largest trucking companies, calls itself a freight logistics company that will not only move freight, but also take orders for service and make sure the goods arrive on time, says chairman and president Jun-Sheng Li. A module called Freightexchange .com works well; however, "it's a very small part of the services we offer," Li says.

Ultimately, marketplace success-as in any business-hinges on far more than technology. "You have to combine a tool like Freightexchange with your vertical-industry expertise, your business relationships, and all the different things together that make your industry work," Li says.

Price is only one part of the equation, Li says, and ties to J.B. Hunt haven't prevented Transplace.com from forming relationships with 5,000 carriers. "We are not in competition with truck lines. We are a logistics company," Li says. And for Transplace.com, the formula seems to be working-it will reach $1 billion in freight revenue this year, and the company's growth rate is in the 30%-to-40% range.