B2B marketplaces are fast growing in popularity all around the world. Online markets are booming, from Alibaba and Amazon to smaller start-ups that cater to certain industries – a trend accelerated by the Covid 19 outbreak.
If you've ever wondered how B2B marketplaces work and how they can help you generate leads and revenue for your company, this is the place to be. We can assist you in answering these issues by providing insight into the B2B landscape.
What is a B2B marketplace?
A B2B marketplace is an eCommerce platform that connects B2B suppliers and buyers to conduct business in one location online. Businesses sell their goods (typically in bulk with B2B) as well as other value-added services in a B2B marketplace, but the sellers are brands, producers, suppliers, and distributors, and the consumers are other businesses, just like in a B2C marketplace. The marketplace operator handles these purchases via the internet.
A B2B marketplace is also known as a B2B trading platform, a B2B acquisition or sourcing website, a B2B portal, a multi-vendor marketplace, a B2B catalog and directory, and more, depending on the diverse nature of B2B selling.
Business models and types of B2B marketplaces
B2B marketplaces come in a variety of shapes and sizes, depending on the participants' structures and other variables.
1. Horizontal vs. vertical marketplaces
Vertical marketplaces (also known as "vortals" or "vertical portals") focus on a single product category or industry. Horizontal marketplaces sell a variety of items and services, catering to the demands of customers from various segments or industries.
2. Many-to-many markets vs. one-to-many marketplaces
A single purchasing business manages a one-to-many marketplace. Large vehicle businesses, such as Nissan, can, for example, create an eCommerce marketplace where their vendors can gain access and submit bids and prices for the services they require.
You may be more familiar with many-to-many marketplaces, in which buyers and sellers are from separate companies and the marketplace is run by a third party. This includes sites like Alibaba.com and Amazon Business.
3. Markets on a local and global scale
We distinguish global and regional B2B marketplaces based on their location. Companies offer exclusively to their local market on local marketplaces, but global marketplaces allow for the exchange of products and services without regard for geographic boundaries. This increases the risk and difficulty of running a profitable global marketplace since it must address extra concerns such as worldwide payment, cross-border business and logistics, communication and language limitations, and so on.
Whether you plan to start your own B2B marketplace or trade through large B2B platforms, the business strategies and revenue sources for such a firm are crucial to understand. The three most frequent B2B marketplace business models are listed below:
4. Business model that is dependent on commission
A commission is paid to the marketplace administrators for each successful order a vendor receives through the site. Depending on type of product, product category, order volume, cart value, and other trade characteristics, the marketplace may impose varying cuts.
5. Subscription-based business model
To use the marketplace's platform for business, sellers must pay a membership fee. This strategy is more prevalent in large B2B trade markets with a large number of repeat customers. To entice more people to join, the marketplace can include some added value in subscription packages. Special account management services, increased visibility into products in the catalogue, access to special categories, marketing features, logistics help, and other services could be included.
6. Listing fee business model
This approach is similar to pay-per-view, which is used in video streaming services. This model requires sellers to pay an additional listing charge when posting a product for sale on B2B retail marketplaces that adopt this model.
Being a part of a B2B marketplace has advantages for suppliers
75 percent of B2B purchases are now made online2, and more companies are using online channels to source and obtain products. Being a component of a B2B marketplace offers providers a tremendous opportunity to grow their sales and business.
1. Create a strong online presence
By digitising your complete catalogue, you'll already be ahead of many of your competitors who are still selling to businesses in person. It boosts your chances of accessing prospective customers and closing large purchases by presenting your products online. It's also like being at a worldwide trade show that's open 24 hours a day, 365 days a year, and where you're always visible and present.
2. Expand your network and capitalise on current buyer demand
Thousands of B2B procurement experts are already using leading B2B marketplaces to conduct their business. B2B marketplaces provide convenience and confidence to B2B buyers by allowing them to interact with and purchase from a large number of vetted and trustworthy suppliers on a single platform. If you don't have the time or resources to reach out to consumers through physical and online channels from your own budget, selling on a B2B marketplace might relieve you of some of the burden and help you develop your network more effectively.
Regardless of the platform's business plan, such as the structures of seller fees, accessibility to a B2B marketplace generally comes at a cheap initial cost that any firm of any size can afford. It also allows suppliers to lower their operating expenses. They don't have to spend more money on traditional advertising channels or update vast printed catalogues.
4. Easy set-up
B2B marketplaces have a common user interface and an easy-to-use seller portal, so you can quickly load your company and product information and get your online business back on track. Product management, CRM, shipping, and payment services are all incorporated into marketplaces. Instead, developing and integrating such complex technologies into your own website could be costly and time-consuming.
5. Testing new items
It's now simpler to get rid of outmoded inventory and SKUs by managing your goods in a consolidated online platform. Your sales data is easily accessed through a B2B marketplace to aid in product creation and selection selections. Marketplace portals frequently offer sales-trend insights and collected data for various segments or industries, allowing you to respond to sales patterns and reap the benefits of "first mover" status, especially during times of crisis.
6. Increase your global customer base
Localization settings and customizations are supported by modern B2B trading marketplaces. They can, for example, show your products in multiple languages and incorporate translation tools and services into the platform. They also provide services and solutions to deal with the complexity of online transfers and logistics. Wholesalers and producers can easily reach a wider variety of audiences and make new relationships all over the world in this way, without having to become experts in cross-border trading themselves.
7. SME access to international markets
Because of the inexpensive start-up charges of B2B marketplace platforms, SMEs have been able to offer their goods and services abroad like never before. Using a B2B eCommerce platform to market your brand is a cost-effective option. Small enterprises no longer need to go around the world on expensive business trips and may display a wide range of items.
8. Improve client service and retention
Effective online B2B platforms allow you to own your commercial connections by facilitating interaction and interaction with your buyers. You can manage your relationship more efficiently and quickly with digitised solutions. Less time spent on the phone and email handling leads and orders means more time to focus on growing your business.
How to succeed in a B2B marketplace?
B2B marketplaces have been defined and classified. The advantages of selling in a B2B marketplace have also been discussed. Let's look at some methods you can use to assure you sell effectively in a B2B environment.
1. Build Trust
Make every effort to convince a customer on the other side of the world who has never met you in person to trust you.
2. Manage and post products
You can stand out from the crowd by posting high-quality products. To improve your product's ranking on the marketplace platform, include descriptive keywords in the name/title and description. To draw customers and help them acquire a holistic picture of your items, use well-designed graphics and videos.
3. Be adaptable and flexible
Your company's growth and evolution will be aided by flexibility. Maintaining contact with and adjusting to the needs of your customers will provide you with a distinct advantage. Providing product customization, price change, and tailored responsive services are examples of such flexibility.
4. Assist with customs clearance and logistics
Ascertain that you can guide your customer on the most cost-effective shipping/freight method. You may also assist customers in knowing the rules and regulations that must be followed when exporting products to specific nations.
5. Answer questions
Orders cannot be placed without inquiry. As a result, always respond to queries in a professional, structured, and timely manner.
6. Use feedback to optimize your offer
Positive comments and testimonials can help your company gain credibility and expand its customer base. Customers should be encouraged to provide feedback. Even negative comments can assist you in determining where the problem lies.
7. Provide samples of your items
Before placing a big order, potential consumers may want to inspect the product's quality. You can make this easier by providing a product sample.
8. Your potential buyers should be respected
Regardless of the size of the firm that contacts you, you must treat them with respect, professionalism, and attention. Then again, if you do a good job of serving them, you will all grow together!
The Best B2B marketplaces in 2022
There aren't many prominent B2B marketplace systems out there now, owing to the complexities of developing technology and establishing a reliable reputation over time.
It's worth digging further to discover if all of these top marketplaces have the demand of the products and popularity, as well as the technology and tools and other value-added services, to meet your specific selling goals. You can also come across various types of markets in your niche.
Now is the time to get started if you think your company would profit from creating a B2B marketplace. There are tons of B2B ecommerce platforms like Growmax that will help you build a great marketplace in a few days times and alleviate the challenge to attract high-quality merchants and turn your marketplace into a destination as more companies develop new marketplaces. If you can launch a B2B marketplace ahead of the competition, you'll reap the benefits in the form of increased revenues and a better working environment.
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