Ecommerce makes the world go round, and business-to-business (B2B) sales are a huge part of these online transactions. As businesses adjust to the effects of the pandemic, the B2B marketplace has become a central pillar to the online seller and buyer relationships. A study by iBe TSD predicts that marketplaces will make up 30% of all B2B sales by 2024.
However, building a B2B marketplace is a complex endeavor and you need to ensure the final product appeals to both buyers and sellers. This is no walk in the park.
In this short and to-the-point article, we will walk you through the entire process, highlighting the common pitfalls and what you can do to dodge them.
Here’s how to get your B2B platform right the first time
Table of Contents
What is a B2B marketplace?
A business-to-business (B2B) marketplace is an eCommerce platform that facilitates the buying and selling of goods or services between companies. It caters to both the demand and supply side in one place, with the marketplace operator processing the online transactions. Most B2B marketplace operators charge for their services in the form of subscriptions, commissions, or payment processing fees.
B2B marketplaces allow buyers and vendors to automate contract negotiation processes through RFQ and leads and opportunities management. Thus companies can build long-term relationships regulated by complex contracts and payment terms supported by the platform.
What’s needed to start a B2B marketplace?
You need to have a business plan before launching your B2B marketplace. It acts as your roadmap towards building a B2B marketplace with functionality that businesses will appreciate. There are several things to consider in putting together your business plan:
- What problem are you solving?
If businesses are going to pick you over existing competitors, you need to be solving a critical problem for them. Remember, your competition already has a well-established user base. Find an eCommerce problem affecting businesses and integrate the solution into your marketplace.
Research into common inefficiencies when brick and mortar businesses incorporate eCommerce is a good start. You can focus on industry-specific problems too to find your niche. There are also opportunities in offering support for online businesses to break into heavily regulated industries.
- How will your marketplace work?
Outlining how the platform will operate is crucial. A business model canvas makes this easy. It is a strategic tool for illustrating and developing your business model. You can put down the finer details like customer segments, value propositions, revenue streams, and more. Begin the process by looking into how sites that solve a similar problem work to find what works for you.
- How will you promote your B2B marketplace?
Reaching out to businesses that could benefit from the B2B marketplace improves your chances of success. Presenting your platform to supply-side users first makes it easier to attract demand-side users. Establish whether you will be running a homogeneous marketplace like Uber or a heterogeneous one like Alibaba. The former offers similar products from different suppliers while the latter has. This information helps you contact the right businesses to use your site.
- Can you achieve B2B marketplace liquidity?
Liquidity measures how useful your platform is to suppliers and buyers. Marketplace liquidity is determined through density, demand-and-supply ratio, and category concentration.
- Density refers to the number of users from a single geographical area.
- The demand-and-supply ratio determines if you attract enough customers for suppliers to make a profit.
- Category concentration is the distribution of demand as compared to supply.
What draws vendors?
Sellers are interested in marketplaces that give them an advantage in their B2B sales. This could be in terms of marketing or managing credit risk.
Vendors often turn to B2B marketplaces to reach new buyers. Providing vendors with functionality to create a smooth sales funnel and easily qualify leads will work to your advantage.
Flexible billing options are also amongst the most sought-after features. B2B transactions are typically large-scale. Providing invoice generation capabilities simplifies how vendors manage client accounts and can attract potential long-term users.
What attracts buyers?
Buyers will flock to a B2B marketplace that helps them find products and services faster. If the service offered allows them to easily vet vendors beforehand, even better! Pre-vetted suppliers are a big attraction for B2B buyers.
Empowering the buyer with flexible payment options is a great way to add value to your B2B marketplace. It is not feasible to pay for huge orders via a credit card facility. Hence companies will appreciate the ability to pay off multiple vendor invoices in one go. It makes it easier to settle their accounts and do bookkeeping.
Common challenges
The challenges of operating a B2B marketplace go beyond launching a functional platform. The most significant problems often arise in relation to how potential users perceive you. Here is a quick rundown of the most frequent obstacles to success.
Unenthusiastic brick and mortar businesses
Often in marketing, you will hear of how “everyone is going digital.” Your goal is to make sure that they go digital through your platform. However, appealing to people running a traditional offline business model can be tricky.
You must convince businesspeople that your B2B marketplace can solve critical pain points better than existing platforms. Promote unique features that offer more convenience, speed up transactions, or improves security. Getting a few notable businesses onboard your platform makes it easier for other brands to trust you.
Growing your reputation
You will also need to monitor the quality of your users if you are to become a reputable marketplace. Actively matching buyers with sellers will improve the reliability of your platform. If businesses can find precisely what they need, they will likely use your B2B marketplace again and recommend it to industry peers. Putting together a rating system and allowing reviews on seller profiles also helps.
Start building
B2B eCommerce continues to grow to unprecedented levels. The timing is perfect for introducing your own unique B2B marketplace. As you are starting out, make sure you have a proper plan in place and build a platform that appeals to the demand and supply-side users.
About Carson Derrow
