Marketplaces like Amazon and eBay have completely upended B2C eCommerce. Now, B2B businesses are starting to get on board.
After all, B2B buyers are consumers outside of the office. They’ve gotten used to the competitive pricing, convenience, and selection that marketplaces offer for their personal purchases, and they’re looking for the same options when they’re on the clock. In fact, 87% of B2B buyers report that they already make business purchases on marketplaces.
B2B commerce still has some work to do to catch up to buyers’ expectations: only 56% of B2B companies have an eCommerce site, and just 11% are operating an online marketplace. The rest are standing by as Amazon builds its multi-billion-dollar B2B marketplace brand, and watching as Alibaba connects customers directly with manufacturers for low-priced goods.
For B2B organizations, investing in eCommerce isn’t just about competing for the sale. Unless they adopt an online solution, they’ll miss out on valuable demand data and lose the ability to improve conversions. They also give up the opportunity to build more direct relationships with customers.
But moving an offline business online isn’t easy – there are challenges to navigate, particularly for B2B companies that are not digital natives.
Navigating the B2B eCommerce challenge
B2B eCommerce isn’t one-size-fits-all. As soon as you start to consider a typical first-party eCommerce solution, the complexities quickly become apparent.
B2B transactions are, in many cases, much more complex than their B2C counterparts. The right B2B eCommerce solution has to factor in personalized customer experiences, B2B pricing strategies like bulk pricing and quotations, multi-vendor orders, and advanced payment solutions – not to mention value-added service offerings.
Channel conflict is a real fear for manufacturers as they start to explore eCommerce. If a manufacturer starts to sell their products directly to consumers online, they could quickly throw the balance of their complex network of wholesalers and distributors.
All of this adds up to what can feel like an insurmountable challenge, especially for organizations that aren’t digital native: how can you build an online commerce platform that manages the complex relationships and transactions of B2B commerce? For many of the B2B leaders taking the leap, an online marketplace is the best solution.
The B2B marketplace opportunity
Businesses are taking the B2B eCommerce challenge head-on and turning it into an opportunity by launching marketplaces that connect buyers and third-party sellers.
Importantly, marketplaces solve the “channel conflict” problem: a manufacturer can simply launch a marketplace and invite channel partners to become the sellers. This offers a more direct relationship with customers, and it gives a new digital sales channel to partners.
Distributors are using the marketplace opportunity to give their customers more of what they want. By integrating third-party product catalogs into their offerings, distributors with marketplaces can easily expand their product assortment. And whether you’re a manufacturer or distributor, a marketplace captures more useful end-customer demand data, helping you to guide your business.
Toyota Material Handling seized the marketplace opportunity and launched the MyToyota Store, inviting their distributors to participate. As Nick Ostergaard, Manager of E-Commerce Sales & Operations and Marketing Systems at Toyota Material Handling USA put it: “It was critical for our authorized dealers to join us online in an effort to upgrade the customer experience in the material handling industry. The marketplace model provides the perfect solution.”
An API-based marketplace is inherently more flexible, too. If you’re operating a first-party eCommerce platform, you still have to buy, stock, and ship inventory, a costly investment that’s difficult to scale. With a marketplace, you can offer more flexibility for all of the products, prices, and vendors your customers want, without having to own or manage any inventory. And as customer needs change, your marketplace can quickly adjust to meet their demands.
The ultimate question: to build or to buy?
Marketplaces are complex. They need to be, to offer an effective online solution for B2B buyers. Building your own can seem daunting, and it can be risky to invest in developing in-house marketplace expertise, even if you already have a first-party eCommerce solution. That’s why more businesses are turning to Mirakl’s out-of-the-box marketplace solution, and working with a digital advisory like Zaelab to drive their digital transformation.
Your customers are asking for it. With such tremendous growth potential, getting a B2B marketplace off the ground quickly is critical. For every day that passes, you miss out on sales and run the risk of losing to competitors.
With Amazon Business’s rapid rise, and other B2B businesses getting on board, you can’t afford to wait. Start with Mirakl & Zaelab’s new whitepaper, B2B Marketplaces: Welcome to the Platform Economy, to draft the blueprint for your platform journey.
Jessica Iandiorio is a well-rounded marketing leader with a track record of helping fast-growth tech companies mature their positioning to move upmarket. She leads marketing at Mirakl, the marketplace platform company.