For an Alternative to the Ariba Supplier Network, Don’t Overlook Ketera

Ever since Ariba decided to hike their already hefty fees, there’s been a lot of chatter about the Ariba Supplier Network on and off the blogs, including a great piece on An American Editor, reprinted here on SI, on the harbinger of getting paid.

Since that time, SpendMatters has been covering multiple Ariba Supplier Network Alternatives, including Hubwoo, Basware, and OB10, but has not made a peep about Ariba’s smaller competitor further down the valley. Now, Ketera may not be as big or loud as Basware, Hubwoo, or OB10, but they have a fairly solid offering and one advantage the other guys don’t have — a very low price point, which is critical for the SME market who can’t afford $20,000 a year just for the privilege of transacting online, which is not even close to new technology anymore.

The Ketera Network is a lot bigger than one might think. While they haven’t reached a Trillion dollars in transactions yet, 50 Billion is nothing to scoff at and with over 100,000 buyers and over 1 Million suppliers, it has reached a respectable size and is still growing.

And, most importantly, it’s very cost effective. It’s essentially free to try, as a seller can list for free using their Amazon-like model and pay 3.5% of the sale, and as soon as the seller closes in on $7,000 in sales, the seller can upgrade to the premiere membership which, at $25/month or $250/year, costs the seller less than pennies on the dollar, and quickly becomes a much more affordable alternative than the ASN at the $16,130 mark. For example, even though (to the best of my knowledge) Ariba limits the transaction fees they charge a seller to $20,000 a year, a seller has to do 1.29 Million in business before the cost drops below 15.5 basis points.

The following table should help an organization evaluating their options put the networks in perspective:

Network Ketera Network (KN) Ariba Supplier Network (ASN)
Service Level Sponsored (Private Buyer Catalogs) Public Listing (Amazon-Like Model) Premiere Membership Standard
Service Cost Free 3.5% of Sales 250/year 0.155% of Sales, up to $20,000
Good When only selling via private catalogs to KN buyers doing less than $7,143 of public sales doing more than $7,143 of public sales doing (considerably) more than 1.29M of sales per year with Ariba buyers

And the following table should help an organization understand the relative costs of the KN Premiere Membership vs. the Standard Ariba Supplier Network Membership:

  Cost Per Dollar of Sale  
Sales Volume KN ASN Winner
10,000 0.02500000 0.01550000 ASN
16,130 0.01549907 0.01550000 KN
100,000 0.00250000 0.01550000 KN
1,000,000 0.00025000 0.01550000 KN
1,300,000 0.00019231 0.01538462 KN
10,000,000 0.00002500 0.00200000 KN
100,000,000 0.00000250 0.00020000 KN
1,000,000,000 0.00000025 0.00002000 KN

The Ketera Network may not be right for everyone, but it’s something every SME should definitely investigate.

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