Not many people know that the first e-commerce in the world was created even before the internet: Among the landmark events of 1969 – a year that changed human history – Ohio in the USA saw the launch of CompuServe, the first e-commerce company.
At that time there was no internet, and the company provided computer-sharing services to businesses by sending data through phone lines (known as Electronic Data Interchange, or EDI). They did so using their own business as an example of ‘selling digitally’. Time passed by, and in 1984, CompuServe introduced the Electronic Mall: a phone-based LAN network that allowed users to purchase products from approximately 100 different merchants. The first marketplace in the world.
From that point onward, the biggest engines for e-commerce have always been the marketplaces: Amazon, Alibaba, Rakuten, eBay, and Shoopee, among others, have conquered online sales globally.
Now, why are we talking about this when it seems pretty obvious that marketplaces are no ‘flash news’? Because recently, B2B marketplaces have grown like a tidal wave. And their arrival could very well mean that B2B commerce is about to take a evolutionary leap, like never before. And if your brand is not capable of dealing with this, this tidal wave of change might drown you in the darkest depths of the Internet. That’s why today, we will help you ride the B2B marketplace wave!
What are B2B marketplaces?
First, let's say that B2B marketplaces have steadily grown in the past year thanks to a combination of perks that makes them a sure bet. Currently, B2B marketplaces account for up to 11% of online B2B spend. But why? Well, to answer this, we first need to clarify ‘the what’. To be more precise, what exactly is a B2B marketplace?
To keep it as simple as possible, we can say that B2B marketplaces are a type of e-commerce platform that allows multiple B2B sellers and buyers to interact and do business in the same digital space.
This makes a clear difference with traditional B2B e-commerce, where normally only one brand – or, in the worst-case scenario, one company with multiple brands – sells to a myriad of potential buyers.
Now, why on earth would you like to share the same space with other B2B brands? Would this not be equivalent to sharing your store with your competition? Well, yes and no. Let's dive deeper into the native mechanics behind a B2B marketplace to better understand why an apparent weakness is, indeed, a powerful advantage.
Why do companies sell their products via B2B marketplaces?
Indeed, inside a B2B marketplace, your brand will be sharing the same digital platform with its competition, but also, this means that potential B2B buyers will be more likely drawn to that same platform because they know that inside it, they will find all the brands and products they are searching for.
1. This brings us to the first perk that makes B2B marketplaces so profitable: a massive increase in traffic. There is no specific research on the matter, but it stands to obvious that when you have your own e-commerce site, only you are responsible for generating traffic towards it. Now in a marketplace, all sellers involved push together to generate traffic, whether they do it consciously or not. This, overall, makes marketplaces far more visited than normal e-commerce websites.
Secondly, when we talk about B2B marketplaces, we are not necessarily talking about the big global ones like Amazon Business. Perhaps the real value of using a B2B marketplace approach lies in using the concept, but with a small twist: creating your own marketplace.
2. B2B organizations can establish their own online marketplace and supplement their own portfolio with selected products and services from other providers, thus fostering business alliances and improving cross-selling and upselling with their own products or with their ally's products.
Thirdly, one of the biggest trends of e-commerce nowadays – and one of the most profitable to master – is customization. To be more specific: to create personalized customer journeys and experiences.
And when this is perfectly possible inside a normal e-commerce, truth be told, inside a marketplace – by its own nature – is far more powerful.
3. Since B2B marketplaces offer a lot more products from different suppliers, personalized product recommendations, tailored content, relevant search results, personalized cross-selling, or customized flash sales are even more important for customers. For example, between two brands offering a similar product at a similar price, a flash sale aimed at specific buyers who have been perusing that product in the last week might be the final push to make them buy one or the other brand. Used strategically, this can be very powerful; if you don’t believe it, check out how Amazon constantly uses it to benefit their own brand Amazon Basics.
And please, don’t discard personalization as an ‘ultra-advanced thing my business can’t do’ because if that’s your case, you need to learn how to do it, and fast. Personalization is not a trend anymore: it is fast becoming a standard in B2C e-commerce, and this is, in turn, passing onto B2B, as it usually happens.
In fact, according to the B2B Future Shopper Report 2023 by Wunderman Thompson, the lack of customization is an issue for up to 56% of B2B buyers when dealing with marketplaces.
In short, selling via a B2B marketplace can allow your brand to create more powerful and complex strategies, joining forces with your natural allies – those products and brands who also benefit from your products and services being sold – and even control your competition if you are smart enough to take advantage of the customization features inside a B2B marketplace.
But, let’s jump to the other side of this story: the buyer. Why would anyone buy in a B2B marketplace? Well, there are really good reasons to do so.
Why do companies buy via B2B marketplaces?
There are multiple advantages for a buyer to go to a B2B marketplace instead of a traditional B2B e-commerce site. Variety and price comparison are obvious, but some other components - more qualitative than quantitative - might be harder to notice at first light. Lets review a few of them, both qualitative and quantitative:
The ‘fairness’ indicator. A B2B marketplace is perceived as a more ‘fair’ place to buy than standard traditional stores. Why? Because, by definition, a marketplace allows ‘multiple brands’ to compete.
It is perceived as a more competitive platform, and for many decision makers to have checked at least one B2B marketplace for the kind of products or services they are planning to buy, is nowadays a must.
Having a price reference from multiple brands bundled together offering similar products or services in one single site is often enough for any decision-maker to make up his/her mind on the current market value of whatever he or she is planning to buy. Henceforth, in many cases, checking on a B2B marketplace will be enough for such decision-makers to make a decision to buy.
Even so, we need to keep in mind that it is true that the majority of sales are still generated via B2B online stores. (2021: 73%, 2022: 75%). But, the marketplace as a prime location for B2B buyers is a powerful trend that doesn’t exclude the use of traditional B2C e-commerce sites.
In fact, B2B e-commerce is growing primarily via marketplaces, with wholesalers growing somewhat faster than manufacturers in recent years. (CAGR 2012-2023: manufacturers 18.7%, wholesalers 25.4%)
Now, for a buyer, using a B2B marketplace has at least three very practical advantages:
On-site price comparison: Allowing buyers to check the prices of multiple brands selling the same category of products and services is perceived as a clear advantage for buyers who want to compare what the market can offer them to catch the best deal possible.
Keep in mind that in your own B2B marketplace, this functionality can be used advantageously to position your brand above its competition by price, quality, or even customer care support. Comparisons are a powerful marketing tool. Be smart about it!
Concentrated shopping: Buyers visiting a B2B marketplace will – most likely – need to buy different categories of products, all from the same sector. For example, multiple spare parts for the same kind of machinery or industrial factory. Knowing that in the same e-commerce site, you can find all things related to your area of business, has a great appeal.
That’s another reason to create your own B2B marketplace: you can turn your e-commerce into a powerhouse capable of fulfilling all the needs of your customers, regardless of the fact that you don’t produce all the products related to your area of expertise. And here is where alliances come into play. By joining forces with other brands from your sector and getting them inside your e-commerce, you increase the value of your website in the eyes of your potential buyers.
Keep in mind that according to a Digital Commerce 360 report titled 2022 B2B Marketplaces: Growth and Trends, sales on B2B marketplaces increased by 131% during 2021 to reach $56.5 billion globally.
Obviously, Amazon Business remains the top B2B marketplace with a predicted gross volume of $41.5 billion yearly. But generally speaking, there is a trend of buyers starting to choose marketplaces over traditional B2B e-commerce sites.
Are B2B marketplaces a good idea for any brand?
Indeed, they are. We could say it more loudly but certainly not more clearly. B2B marketplaces are a great addition to your B2B sales channels.
Especially if you create your own B2B marketplace. Doing so, allows you to implement a lot of ultra-effective marketing strategies that can boost your sales alongside your traditional B2B e-commerce.
In fact, B2B marketplaces should not be thought of as ‘either a B2B marketplace or a B2B e-commerce’. That will be a mistake.
You can combine a B2B e-commerce and a B2B marketplace in one single solution capable of opening new markets for your brand, increasing your revenue, and providing your customers with a better, more efficient, customized journey.
It is true that not all e-commerce solutions are capable of combining both a B2C e-commerce and a B2B marketplace in one single platform, but Intershop has this capability and is actively pushing towards a hybrid model for B2B business. A model that, surely, will be the next step in B2B e-commerce. So, what are you waiting for? Ride the wave, my friend, for B2B marketplaces are on the rise!