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How Can Your Business Get Involved in B2B Markets?

Learn how to increase revenue with B2B marketplaces, eProcurement integration, and B2B automation, including PunchOut catalogs and sales order automation.

MarketplaceBlog2Image.jpgA B2B marketplace is an eCommerce store where multiple sellers sell to multiple buyers. A traditional B2B eCommerce store has a one-to-many relationship with its buyers; one seller sells to many buyers. Marketplaces transform eCommerce into a many-to-many relationship.

We explored the finer points of B2B marketplaces in What is a B2B Marketplace, so here we’d like to take a closer look at how and why B2B manufacturers, wholesalers, and distributors leverage marketplaces.

There are three roles an organization can play in a marketplace: they can buy from them, they can sell on them, or they can create a marketplace and become a marketplace operator.

Buying from B2B Marketplaces

Buying is the simplest way to get involved in B2B marketplaces. Marketplaces expose buyers to more sellers than they could hope to discover and research alone. Sellers are typically held to a minimum standard by the marketplace operator, which may publish reviews and other information to help buyers assess the quality of products and the businesses that sell them.

A marketplace operator may also offer B2B-focused digital services to streamline the sales process, including quotes, RFPs and RFIs, and contract negotiation. Marketplace operators are motivated to make finding a seller and buying from them as seamless as possible.

Buying from unknown sellers is risky, which is why businesses tend to stick with what they know, establishing long-term business relationships. That’s great for sellers, but it limits buyer flexibility and reduces competition, keeping prices higher than they might otherwise be. The ability to buy from multiple sellers in a single, coherent interface is a key benefit of B2B marketplaces.

For example, is a hugely successful B2B marketplace in the fashion industry. Over 8,600 fashion brands sell on Joor, supplying products to over 200,000 retailers. Many are small retailers who couldn’t hope to establish one-on-one relationships with even a fraction of the brands represented on the platform. Joor gives them access to a massive supplier market and reduces the cost and complexity of buying for their stores.

Selling on B2B Marketplaces

Marketplace sellers benefit from access to many more buyers than they could build a direct relationship with. The Alibaba B2B marketplace is so successful because it established itself as a trusted platform for buyers and suppliers in hundreds of industries. Buyers know that they will find the products they need, making the marketplace their first destination when seeking products.

Consider what it would cost to market your products to the business buyers who use platforms such as Alibaba, the Ariba Network for Suppliers, or Merck’s Sigma-Aldrich.

Sellers on marketplaces take advantage of the reach, the brand, and the reputation of the marketplace operator. Marketplaces also help B2B suppliers, distributors, and wholesalers to reduce marketing and sales costs, increase efficiency, and more easily establish trust with buyers.

Because marketplaces want as many sellers as possible on their platform, they try to make it straightforward to add product catalogs and drive sales. They often offer sophisticated customer relationships, catalog management, and order management features that further enhance sales and increase revenue.

Operating a B2B Marketplace

Forward-looking B2B businesses are moving beyond buying and selling on marketplaces. Recognizing the revenue opportunities inherent in the marketplace model, they create marketplaces of their own. They transform their existing digital sales platform and its one-to-many configuration into a many-to-many platform by becoming a marketplace operator.

Volkswagen’s commercial vehicles unit did just that with RIO, a marketplace on which logistics operators list truck availability. Crucially, while many such digital platforms focus on one company’s services, RIO is an open marketplace for logistics companies. The platform facilitates efficient discovery and procurement of delivery capacity for buyers, and vehicle operators benefit from increased vehicle utilization and revenue. As the marketplace operator, Volkswagen attracts more buyers to its platform and increases revenue through marketplace services and fees. 

In the retail world, Best Buy Canada transformed its eCommerce platform from a single-seller to an open marketplace model, helping suppliers of a broad range of products to sell directly to Best Buy customers. As a result, the number of customers visiting the store increased enormously. The marketplace quickly grew to dominate product areas in which Best Buy had little impact before the marketplace. For example, it quickly grew to be the No. 1 seller of baby products in Canada.

In both of these examples, the marketplace operator attracted many more buyers than was possible with a single-seller store. Revenue grew substantially because sales of the company’s products increased and because of new revenue opportunities such as sales fees and premium services.

As Adrien Nussenbaum, CEO of Mirakl, said, “The benefits of the platform business model are vast: more products, better prices, a larger brand footprint, and above all a better offer for your customers. For industrial distributors who are willing to take the lead, moving quickly can make all the difference.”

The Challenges of Becoming a B2B Marketplace Operator

The benefits of the marketplace model are clear, but businesses that decide to build an open marketplace face technical challenges. They may already have a digital sales presence in the form of an eCommerce store, and they cannot see a clear path to evolving from single-seller eCommerce to marketplace.

Furthermore, many buyers want suppliers to offer B2B automation services, including eProcurement platform integration. eProcurement is the fastest-growing B2B sales channel, and eProcurement users expect marketplaces to provide a range of automation features such as PunchOut Catalog purchasing, eQuoting, electronic purchase orders, and electronic invoices.

Fortunately, both sets of challenges are largely solved by innovative marketplace and B2B service providers like PunchOut2Go and Mirakl.

  • PunchOut2Go’s Integration Platform as a Service empowers marketplace operators to integrate their platform with buyer eProcurement platforms. With PunchOut2Go, any marketplace eCommerce solution can offer PunchOut catalogs and sales order automation to buyers on any eProcurement platform.
  • Mirakl helps businesses to transform their existing eCommerce store into a B2B marketplace, whether it’s based on Magento, Shopify, Salesforce Commerce Cloud, or other eCommerce software. Mirakl provides a range of multi-vendor order management, advanced payment, and marketplace management solutions.

Gartner estimates that, by 2023, 15 percent of medium-to-large B2B businesses will have deployed a marketplace and that 30 percent of marketplaces will have transitioned to a third-party seller model. The rapid increase in open B2B marketplaces is driven by the marketplace platform model’s revenue and profit advantages.

To learn more about bringing eProcurement integration and sales order automation to your B2B eCommerce store or enterprise marketplace, complete the form below, and a PunchOut2Go integration consultant will contact you soon.

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