Abstract: Extranet-based electronic commerce will be the main way by which trading partners cooperate and trade. The paper quantitatively analyses the efficiency and profits of Extranet systems managed and controlled by manufacturer, and agrues that Extranet system efficiency and anticipants' profit are influenced and decided by the manufacturer's Extranet policies. The critical factors improving Extranet system efficiency and profits are suitable and efficient Extranet policies of the manufactures.

Key words: E-commerce, Extranet management, incentive mechanism