B2B marketplaces are less common than B2C marketplaces we all got used to shopping online on. Among B2B marketplaces, there are much more B2B service marketplaces because businesses need services way more often than individual consumers.
According to Statista, all B2B eCommerce transactions counted $12.2 trillion in 2019 worldwide. That’s an insane amount of money. And the greatest thing about starting a b to b marketplace is that there are thousands of unoccupied niches you can enter to become an online marketplace b2b leader.
In this article, we are talking about what a marketplace for b2b is, what its benefits are, and why it’s a good idea to start your own B2B marketplace.
What is B2B anyway?Generally speaking, there are three main types of business models:
There are also some variations and more complicated models like D2C but they are more rare, so we’re going to focus on explaining these three. Just that you have an understanding of how B2B differs from other models.
B2C is an abbreviation for Business to Consumer. This means that a company produces (or resells) products and sells them directly to end customers. This is the most popular business model out there and most of the online marketplaces are B2C. For example, Amazon is a B2C marketplace in its essence. Aliexpress, Etsy, eBay—all of them are focused on selling to end customers.
C2C stands for Consumer to Consumer. On this type of marketplaces individuals sell to other individuals. The best example here could be a classifieds marketplace like Craigslist. Also, eBay partially works in C2C.
B2B is a business model where companies sell products and services to other companies. The abbreviation stands for Business to Business. Businesses buy from other businesses a lot of different things—starting from office supplies to complicated industrial software and business services. The largest B2B business marketplace out there is Alibaba.
What is a B2B marketplace website?So, let’s dive a little deeper to the essentials of a b2b portal marketplace. What is it? Well, online b2b marketplaces are multi-vendor commerce websites where multiple independent vendors or service providers sell their products and services to other companies. These marketplaces look just like usual marketplaces for end customers but with emphasis on working with businesses.
A marketplace b2b website is built on a special software platform. These b2b marketplace solutions should have specific functionality to cover the needs of businesses. The thing is that businesses have different buying processes compared to individual shoppers. If a consumer can just put the desired product to cart and pay via PayPal, a business can’t do that in most cases: they need different documents to close the transaction, and other business-specific features.
These days, more companies prefer to purchase products and services on online marketplaces. It’s just more convenient for them. Just imagine: a company needs office supplies and printing equipment for its offices. If they buy from different suppliers in the old way, the company’s managers need to spend hours on phone calls, order from various suppliers, and deal with tons of papers. B2B marketplace platforms address these problems: a manager just needs to put products to the cart and pay (just like an ordinary consumer but with some minor differences in the process).
Who uses B2B marketplace websites?As we learned from the previous section, b2b online marketplaces the websites where companies buy products and services from other companies. But besides companies, b2b global marketplaces are a great shopping and selling platform for individual entrepreneurs, self-employed individuals, independent contractors, and managers of different levels in companies. Let’s see who can sell and buy on b2b online marketplaces:
- Procurement managers. This is the main and the most numerous customer group on B2B marketplace websites. They order products that their company needs to keep running such as office supplies, equipment, etc.
- Independent contractors such as stylists and makeup artists. They can offer their services online without hassle and not being tied to brick and mortar studios. A company (let’s say a photo or movie studio) searches for artists on marketplaces and hires them.
- Managers of different teams and levels in a company. For example, a marketing manager can order PR, copywriter, or advertising services from other companies that specialize in these services. A finance team manager can order accounting services and software, etc.
- HRs of companies. They can use a b2b service marketplace to order services within their company’s budget and book them directly on the platform.
- Small and medium businesses use b2b marketplace online platforms to order goods of all kinds for their company, offices, and employees.
So, let’s sum it all up: a B2B marketplace platform is an online multi vendor website where company managers and individual entrepreneurs can shop for products and services and sell them to other businesses.
What are the benefits of a B2B marketplace?
There are lots of benefits of selling and buying on b2b global marketplaces as well as local ones. First of all, we should divide benefits to the ones of the marketplace owner and the marketplace sellers. Let’s start from the owner’s benefits as they are quite obvious.
B2B marketplaces are not that mass as B2B multi-vendor sites like Amazon and Aliexpress. It means that the competition is not that strong in this segment. Another benefit is that there are still a lot of unoccupied niches in B2B—you have plenty of choice what niche to focus on and become the best b2b marketplace platform in this niche. And one more benefit is the amount of money you get from a single order—companies buy a lot more products at once. And they usually work with service providers for a long period of time.
For sellers and service providers there are many more benefits. These days, over 75% of B2B buyers switched to purchasing in marketplaces. So, entering business to business b2b wholesale marketplaces to offer your products to other companies can definitely drive your business to the next level. Here are some of the benefits you’ll get as a B2B marketplace seller:
- Expand your network and gain an audience. As we mentioned above, 75% of procurement professionals purchase goods and services on B2B marketplaces. It’s a huge audience you can get. This is the main benefit of all marketplaces, not only B2B. On marketplaces, there are usually millions of potential buyers that can become your new customers.
- Low costs of doing business. Best b2b marketplace platforms usually offer sellers and service providers all the necessary tools to start selling and accepting payments right off. Moreover, the marketplaces often help their sellers with marketing. This means businesses no longer need to update lengthy printed catalogs or spend money on traditional marketing channels.
- Easy to start selling online. A B2B marketplace is usually built for businesses that don’t have a technical or eCommerce background. This means the platforms usually offer convenient tools to sell online that don’t need much training.
- Test hypotheses and experiment with new products. Because you can start selling on a marketplace quite easily and fast, you can use this opportunity to test new products and services without risking losing much money and time.
- Go global. That’s an opportunity that a b2b global marketplace like Alibaba or Amazon Business can give you. With a marketplace that works globally, you’re getting access to a larger customer base.
- Improve customer service. B2B marketplace websites greatly save you time on internal business processes. Instead of being on calls for hours and filling in endless accounting documents and contracts, you can spend this time on improving relationships with your customers and increasing their loyalty.
What are essential features of a B2B marketplace?Compared to a B2C marketplace, a B2B marketplace needs some specific functionality to offer a great shopping experience to businesses. Let’s see what essential features the best online b2b marketplace should offer to sellers and buyers:
- Customer profiles with multiple users. The buyers need to create multi-user accounts. As a rule, the purchasing process in companies involves more than one person. For example, a manager creates an order, a supervisor checks it and pays, and an accounting guy works with the papers. It’s very inconvenient and unsecure when each of the account users has to pass account credentials to another person.
- Quick re-ordering. Let’s say you sell consumables to factories—cleaning agents, office supplies, and other products that need to be regularly re-ordered. Purchasers can re-order the same products with the same quantity by just clicking one button in the customer account. Handy!
- Ordering products in bulk. Companies usually buy products in bulk, so it’s important to optimize the order formation process to make it faster. The Add products to cart in bulk feature allows purchasers to quickly add a big number of items at once to the cart. They usually do it right on the product category page.
- Analytics. Businesses care about their performance. You need to offer your B2B sellers a convenient way to track their statistics so that they could analyse and correct their sales and other business processes.
- Customer tiers. This feature usually assigns a purchaser to a privileged user group when they spend a certain amount of money. It greatly automates the price formation for purchasers so that the purchasers could get personal prices.
- Stock notifications. If a product is out of stock, you can allow the purchasers to order in advance or subscribe to the in-stock notification. This way, a purchaser doesn’t need to check your website daily to know if the product is in stock again. The purchaser will receive the notification to the mailbox once you have the product. Low-stock notifications can help your sellers keep track of the number of items left in stock. Once the number decreases to a defined threshold, they will know that it’s time to refill the stock.
- Personal manager. Procurement managers usually communicate with a personal manager assigned to them by the marketplace. A personal manager helps with forming orders, processing payments, returns, and making recommendations. So, a buyer needs a block or a contact form in their account to contact the personal manager.
Examples of the best online B2B marketplace websites
If you are planning to sell your products or services to other companies on a marketplace, you need to conduct thorough market research of the best online b2b marketplaces. There are a lot of them—local and global—and each has its own terms and conditions. Here’s the starting point for you—3 most popular b2b marketplaces you can do business with.
This is one of the largest B2B marketplaces in the world, or maybe even the largest. This multi seller website origins from China. This is a part of the Alibaba Group owned by the famous entrepreneur Jack Ma. Alibaba offers a wide variety of products—from electronics to minerals and metallurgy products. Available for sellers from China and worldwide.
This is a part of the marketplace giant Amazon. This “business" branch is focused on B2B trade. Here, companies offer services to other companies. There’s also a number of physical supplies categories. One of the best b2b marketplaces to work with in the United States.
This is another B2B global marketplace based in the United States with operational offices in China, Nigeria, and Pakistan. Just like Alibaba, it offers a wide range of products and works globally with verified sellers and buyers.
B2B is a business model where companies sell products and services to other companies. There are many online marketplaces that work in the B2B segment but still fewer than classic B2C marketplaces.
On B2B marketplaces, company managers and individual entrepreneurs can shop for products and services and sell them to other businesses.
There are a lot of benefits of selling and buying on a B2B online marketplace. For the marketplace owner it’s less competition, for sellers it’s growing their audience, and for buyers—a convenient way to buy supplies without tons of paperwork and communication with multiple suppliers.
B2B marketplaces require specific functionality to keep shopping experience for businesses at a high level.
You can start selling your products to companies on one of these three B2B marketplaces: Alibaba, Amazon Business, eWorldTrade.
Q: What is a B2B online marketplace?
A: It’s an eCommerce website with many independent sellers, who sell products and services to other businesses only.
Q: How does a B2B marketplace earn money?
A: Usually, sellers pay commissions for each sale to the marketplace.
Q: How to create a B2B marketplace?
A: To build your own B2B online marketplace website, you need a software platform that supports B2B-specific functionality. For example, CS-Cart Multi-Vendor will be a good fit.
Q: Can I sell on a B2B marketplace without previous eCommerce experience?
A: Yes, you can. The best B2B marketplaces offer all the tools to onboard new sellers and help them set up accounts, sell, and market their products.