B2B Ecommerce Marketplace Is an Exploding Sector in B2B

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January 15, 2021
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B2B Ecommerce Marketplace: How It Works
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Channels though which B2B buyers research and buy products.

While it is generally accepted that marketplaces work well for the B2C sector, their effectiveness for the B2B sector is even greater. Marketplaces provide the ability to search for the necessary goods online by providing extensive catalogs. So creating a marketplace and listing products on it can simplify and speed up the process of closing sales.

According to global statistics, 83% of wholesale buyers look for a product directly on sites, 77% of them prefer to do it using search engines (Google) while 34% use B2B marketplaces. Online sales are growing 10-15% annually, and marketplaces have a great impact on the growth of online sales. B2B ecommerce marketplace revenue is rapidly growing from year to year. The Ecommerce Foundation and Nyenrode Business University predicted in 2015 that marketplaces will account for 40% of online sales by 2020 and they were right. For example, the largest B2B marketplace Alibaba every year visits more than 800 million users. The service accounts for 43% of total e-commerce sales in China

Besides, there are two trends in the business market today: globalization and digitalization. Marketplaces combine both trends, allowing for a modernization of the sales process and a change in the traditional model of interaction between producers and buyers. Moreover, according to Forbes, 50% of all B2B purchases are made directly online. This fact suggests that today’s companies need to sell their products online to achieve maximum results, and marketplaces are one of the best ways to achieve this.

How do B2B marketplaces differ from B2C marketplaces?

B2B vs B2C sales in 2020

B2C marketplaces (business to consumer) are platforms where manufacturers or sellers offer their products and services to end-users. Such marketplaces often operate not only in a browser but also have mobile applications. Examples of the B2C marketplaces are Amazon, Overstock.

B2B-marketplaces (business to business) are platforms where businesses trade with businesses. The goal of the B2B marketplace is as much as possible to disclose the features of goods or services to show the business customer unique advantages. Examples of the B2B ecommerce marketplaces are Alibaba, Made-in-China, Tradalaxy. 

Content quality and data accuracy are very important in the B2B segment. The average B2B buyer uses at least six different channels of information to make a decision. Although the B2B ecommerce market follows B2C, there are still some differences between them.

The basic difference between B2B and B2C marketplaces is that in B2C customers select products based not only on price but on popularity, status, and brand while B2B customers make decisions based on price, potential profit and as per their business requirement. 

Key differences between B2B and B2C marketplaces:

  1. Order volumes – on B2B ecommerce marketplaces business supplies to businesses, therefore, the goods are always in large quantities whereas, on B2C marketplaces, the end-user gets the product as per his or her need.
  2. Products categories – in the B2B marketplace, companies deal with specific products and have a niche in their customer segment while in the B2C marketplace, companies deal with a broad market of consumer products.
  3. Pricing – in the B2B marketplace, the prices are quite diverse for different customers, in the B2C marketplace, prices are fixed for every customer.
  4. Payments & order cycle – in the B2B marketplace customers prefer to pay on credit while in the B2C marketplace customers pay the payment directly, either using online payment method options or cash on delivery.
  5. Customer relations – in the B2C marketplace, are reliant on getting more and more customers while in the B2B marketplace, the priorities are building long-term relations with clients. 
  6. Checkout process – in a B2B marketplace, the checkout process is quite complicated because of the multiple orders, particular payment methods, and delivery methods while in B2C marketplaces, the sellers prefer a simple checkout process to provide their customers with a hassle-free experience. 

What do today’s emerging B2B marketplaces look like?

Positioning of the marketplaces in comparison with the competitors.

Of course, the new generation of B2B marketplaces is not “one size fits all.” New B2B ecommerce marketplaces fall into one of two main categories — niche players and market leaders. B2B-platforms are created to organize wholesale sales, where the buyers are representatives of the business. For example, Aliexpress (B2C) works primarily with consumers, while Alibaba (B2B) connects manufacturers and suppliers with client firms.

In any case, a marketplace can be focused on a narrow segment of the market or have a wide range of offerings. There are a lot of marketplaces that offer a wide range of products, from food to clothing, from cosmetics and household chemicals to agricultural machinery and factory machines. Specialization has a great impact on B2B ecommerce marketplace revenue. 

Marketplace specializations can be niche (vertical) – the site aggregates offerings from several vendors of the same type. You can find not only the prices from suppliers but also the prices of competitors in the marketplace. Another type of organization is horizontal marketplaces: they are not mainly focussed on a specific category of items to sell but sell almost everything thus, reach a broader audience. Horizontal marketplaces show higher B2B ecommerce marketplace revenue than vertical ones.

The most popular European B2B marketplaces:

  1. Europages – B2B platform with 3 million registered businesses, mainly manufacturers, wholesalers, distributors, and service providers that attracts more than 2 million monthly searches for business partners, suppliers, and service providers in Europe and around the world.
  2. Applegate – B2B marketplace from the UK that focuses on finding manufacturers of certain products. The user can request a variety of offers, ranging from business services to promotional materials.
  3. Mercateo – the German-based cross-industry B2B marketplace that brings together about 700 suppliers, 11,000 producers, about 21.5 million available products, and more than 1.4 million business customers. The site is designed to find trading partners and create a network of partners. 
  4. Zentrada – European B2B marketplace that buys goods from suppliers directly (on its own terms as a wholesale buyer), sells them under its logo and is responsible for shipping.
  5. Restposten – B2B marketplace that offers goods that have been produced in surplus, or with minor defects, or have not found a buyer. 

Is Magento the best tool for the B2B and B2C marketplace development?

Examples of niche and general product marketplaces

While B2B ecommerce marketplaces have become increasingly popular, many businesses are concerned that building a marketplace could be expensive and time-consuming. They often envision lengthy systems integration projects and custom development. However, marketplace technology has matured over the past couple of years. Existing marketplace software provides an opportunity to start your own marketplace without having to write all the code from scratch.

Don’t know how to build a B2B ecommerce marketplace and what CMS to use? We recommend Magento. Magento is a tool that is great for large companies and marketplaces. Magento Commerce can handle up to 350 million catalog views and 487,000 orders per day. This is one of the most reliable CMS-platforms for B2B ecommerce marketplaces. Among its main advantages: open-source, rich functionality, and flexibility. The reasons for the high popularity of Magento are obvious.

Convenience in information management

A high-quality and understandable interface allows anybody to work effectively with images, quickly update product items, view and analyze analytical data, quickly change the necessary attributes, identify and offer customers complementary and similar products, work with the prices. The obvious pluses are also the adaptive design, layout, and the ability to view the marketplace on any device with different resolutions and forms. Also, Magento integrates with popular PIM (Product Information Management) solutions.

Marketing

Magento offers the ability to set price rules for the shopping cart and the catalog, to manage promotions and discounts on the established product matrix, manage banner sites, use automated email, remind customers of abandoned carts, work with up-sell and cross-sell technologies, receive and analyze information in real-time and quickly solve many other important marketing tasks. This greatly affects the B2B ecommerce marketplace revenue. 

Search Engine Optimization

Search engine traffic can undoubtedly be considered an important promotional tool for today. Magento has special features that allow for effective SEO-optimization, among them: working with meta-data, automatic generation of a sitemap, the ability to create pages with a product matrix corresponding to certain filters, and edit them separately, as well as other useful options.

Scalability

This CMS boasts the stability of the work. Magento-based B2B ecommerce marketplaces excellently cope with its functions, any influx of visitors, a large number of orders, and with a constantly high activity of visitors to the marketplace.

Ability to integrate

Due to its flexible architecture, the marketplace on Magento is possible to adjust for any needs. In fact, Magento-based marketplaces can integrate almost any solutions, for example, different payment and analytics systems, CRM, and ERP-systems.

Technical support and security

Due to SSL encryption support and regular security updates, the security of Magento-based marketplaces is of the highest level. Magento supports and regularly releases security updates, this allows you to keep the state of the information security of the marketplace at a high level.

The development (creation) of a B2B marketplace will require a considerable investment of time and money. We have an article about how to choose the best solution for manufacturers and wholesalers. The main point to pay attention to when choosing a developer – examples of created marketplaces. Study the examples of marketplaces, and analyze the set of features that will be useful for your company. 

Magento is a good solution for B2B and B2C marketplaces. It includes a wide range of functionality, has a clear interface, and integrates with third-party services. Due to the active development of mobile commerce, Magento will be a great base for creating your own application and will allow your business to be as effective and profitable as possible. Elogic professionals with a wide range of completed Magento-based projects will help you to create an innovative, profitable, and maximally client-oriented B2B or B2C marketplace.

Questions to ask if you’re thinking about building a B2B marketplace

Most successful B2B marketplaces

Of course, running a B2B marketplace is considerably more complex than managing a single-company ecommerce store. If you’re thinking about building a marketplace, it’s important to develop a comprehensive strategy and understand how you’re going to address a range of challenges, from seller onboarding to handling taxes and compliance.

If you’re thinking about building a B2B marketplace, there are some questions that will create a clear understanding of how your B2B marketplace should look like. A clear understanding of your future marketplace directly impacts B2B ecommerce marketplace revenue. You should discuss them with the developer before the marketplace development starts.

  • What kind of audience are you looking for?
  • What will you sell: products or services? What is the minimum order volume? Is a narrow or broad specialization of the project planned? What information about products is needed to make a purchasing decision?
  • Are you going to work with companies within the country or abroad? What documents and permissions are required for the transaction?
  • How do you attract customers to the site? How much can it cost?
  • Who should be entrusted with the implementation of the project and strategy? What IT platform will be used to implement the project?
  • What is the best way to monetize your project: pay per order, listing, or additional services? Will payment for goods and services be made through your site or directly on the companies’ websites?

Key takeaway: now is the time to create your own B2B marketplace

If you think your business might benefit from building a B2B marketplace, now is the time to get started. As more companies launch new marketplaces, it will become more difficult to attract high-quality sellers and make your marketplace greatly popular. Accordingly, it will be more difficult to get high B2B ecommerce marketplace revenue. If you can start a B2B marketplace ahead of your competition, the rewards — in the form of higher earnings and the chance to lead your market — will make you rich.

Among the advantages of B2B ecommerce marketplaces are:

  • Convenience and 24/7 access to online ordering.
  • Possibility to personalize accounts, price lists, assortment, and other terms for contractors.
  • Competitive prices, direct deliveries without intermediaries.
  • Transparency and control of all stages of the transaction.
  • Possibility of integration with accounting programs to instantly reflect changes in inventory balances.
  • High B2B ecommerce marketplace revenue.
  • Automatic collection of statistics and reporting.
  • Saving up to 70% of managers’ time for client servicing and service acceleration.
  • Possibility to add necessary business modules.

Don’t know how to build a B2B ecommerce marketplace? Elogic can help you to create your B2B marketplace. Our 60+ Magento certified experts help companies in both B2B and B2C segments build technology that empowers eCommerce growth. 

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