Marketplaces offer all sorts of advantages for a B2B eCommerce business strategy, so no wonder they’re becoming increasingly popular.
Research and consulting firm iBe has estimated that global B2B marketplace sales could reach a staggering US$3.6 billion in 2024, driven partially by the impact of COVID-19 on the business landscape, but just as importantly, because they make a lot of sense for a B2B.
There are plenty of examples of business-to-business (B2B) marketplaces, even if their B2C cousins are perhaps better known among the general public. Two B2B marketplaces with incredibly high brand recognition though are Alibaba and Amazon Business. However, as our platform partner VTEX puts it, there’s more to B2B marketplaces than the likes of what Amazon offers:
“Although Amazon would be the perfect example, B2B digital commerce technology platforms go beyond it, displaying many ramifications and complex configurations. Amazon Business platform features might get a complex B2B business halfway there — but that won’t meet customer experience expectations or put a B2B business ahead of their competition.”
So why exactly does a marketplace make a lot of sense for a B2B? Let’s dive in.
Efficiency gains are always important to secure at any stage of B2B development and using a marketplace is one of the best ways to do just that. If your B2B sales operation is disparate and spread across channels and departments without proper communication, you can get a hell of a lot more efficient by using a marketplace.
A solid B2B marketplace eCommerce platform should allow you to integrate orders and inventory across all your channels, giving you the ability to deliver a consistent experience to all your customers. This means they’ll enjoy the same level of service whether they place an order from your eCommerce website, marketplace, physical store or via a mobile app.
In addition, delivery and fulfillment processes can be optimized with the use of a marketplace, keeping customers happier and saving you money.
VTEX’s work with Unilever is one example of a B2B marketplace streamlining operations to great effect, just take it from our platform partners.
“Through this B2B marketplace, Unilever fully embraces VTEX’s collaborative commerce approach. With a streamlined ordering process and an upgraded visibility over all orders, the project aims to add convenience and efficiency to the incredibly complex supply chain that exists within the CPG industry. Thus, the one-stop-shop will tame channel complexity across Unilever’s entire network of business partners, enabling all parties to then focus on the essential: sustainable revenue growth," they say.
Similar to demand forecasting, a solid customer acquisition strategy is a crucial component of B2B eCommerce success and yet another area a marketplace can help you in.
Hubspot found that 73% of marketers said acquiring new customers was their top objective for social media in 2021, while 49% of companies placed increasing customer acquisition as their top priority. So, suffice to say, customer acquisition is key to success with any eCommerce business.
So how can a marketplace help a B2B improve customer acquisition efforts? Firstly, a well-built marketplace can be a godsend for B2B buyers used to clunky websites and the common time-consuming in-person buying process. If you have a user-friendly marketplace software and a beautifully designed site, your marketplace will be a much more attractive proposition for B2B buyers than their bread and butter. It also helps if you have acquired a large number of sellers, but more on that shortly.
Using a marketplace lowers the entry barrier for prospective buyers. If your signup procedures are simple and quick to follow (and they should be), it shouldn’t cost a prospective purchaser much time or effort to sign up. Once signed up, you have a potential new customer to market to.
For sellers, VTEX makes the salient point that the acquisition of this is a crucial part of a marketplace that can’t be ignored:
“This [seller acquisition] is the single most underrated element of every single marketplace I have ever run or consulted. How often have I heard the words “yeah, I’ve talked to a few people who are interested”? This is a universe away from actually having a seller who has signed your agreement and even farther away from a seller who has successfully onboarded. Seller acquisition is the first foundational layer, with seller optimization and acceleration coming into play only when it’s robust enough.”
Acquiring new customers is a key objective for most businesses.
Customer acquisition is all well and good, but we all know the most important step is making sure they actually follow through on a purchase and maximizing the value of that purchase for your organization. This is another area where a B2B marketplace can shine.
What is one of the hallmarks of the Amazon shopping experience in your life as a retail customer? The on-site recommendations, of course. Amazon does a great job of showing each customer other items similar to what they’re viewing, items they’ve previously viewed, and products other customers purchased alongside the one they’re considering. A B2B marketplace allows you to up-sell, cross-sell and all sorts of other revenue-maximizing things. Best of all, you’ll be doing it with potential buyers already on your site, instead of having to entice them to return again and again to purchase new products.
As VTEX explains, it also makes for a more convenient experience for your customers, which is never a bad thing.
“With customers already buying products, opening a marketplace model is an opportunity for B2B organizations to cross-sell and upsell complementary products that customers likely need, saving them the hassle of navigating to another buying experience.”
“If you want something done right, do it yourself,” goes the old saying, but unfortunately, it’s not always an option when it comes to B2B eCommerce. Lots of B2B organizations that use marketplaces work with multiple partners and vendors to supply their goods and services, and managing all of those different relationships can sometimes be a bit of a headache.
This is another area where a modern marketplace shines, as any B2B marketplace worth its salt should have features like multi-vendor order management, multi-vendor inventory management, efficient logistics, and more.
To expand on just one of those features, VTEX explains the key functionalities multi-vendor order management entails:
“Advanced shipping management, dropship and carrier selection, split orders, and order life cycle management.”
A marketplace also makes it easier to be customizable and flexible with your pricing. This can mean anything from offering discounts to flexible payment options, as well as bulk pricing, minimum or maximum order quantities, and more.
Enjoying the benefits of economies of scale is the goal for a lot of businesses, and when it comes to B2B eCommerce, you’ll need technology that can scale up as your business does. It’s no good having more orders and interest in your products and services than your tech can handle; what you need is a scalable platform.
This is where a marketplace comes into its own, as scalability is baked into a good marketplace. This can give you a huge advantage over the competition, as long as you’re on top of the business fundamentals necessary to ensure your marketplace scales.
Remember, you need a sufficient amount of supply of (sellers) and demand (buyers), to build trust with B2B buyers, and to ensure the buying and procurement process is as simple and pain-free as possible. In the past, breaking offline buying habits was also a key consideration. While this may still be an issue for some buyers, the pandemic has led more B2B decision-makers to order online. Research shows that about three quarters of B2B purchasing decisions are now made by Millenials, and 44% of them prefer no sales rep interaction at all in a B2B setting.
So with those fundamentals in place, your B2B marketplace should be able to shine.
“With a B2B marketplace, businesses can customize and scale their marketplaces to meet unique requirements when managing channel partners, customer expectations, and existing third-party relationships,” VTEX says.
To find out if a marketplace could be the right move for your B2B eCommerce business, why not get in touch with SmartOSC here.
You can also reach our platform partner VTEX here for expert advice on all things marketplaces, and much more.