The Most Important B2B Marketplace Features (and Why You Need Them)

The outstanding performance of marketplaces continues to turn heads. According to a DC360 report, B2B marketplace sales exploded to $112 billion in 2022—up 100% from 2021.

Figures like that are inspiring more and more businesses to launch their own marketplaces. However, any enterprise thinking about taking this path in ecommerce needs to be aware that multi-vendor marketplaces don’t operate the same as single-vendor commerce stores. Marketplaces have multiple stakeholders, bringing together buyers and sellers in a single place, adding a whole new level of complexity for operators. 

This means that the features required to operate a successful B2B marketplace differ from what’s needed for single-vendor businesses. You’ll need a marketplace platform that can streamline the specific workflows and relationships required in a marketplace.

Before we go into detail about the top B2B marketplace features to look for in a marketplace platform, we’ll first quickly provide an overview of some of the biggest advantages of the marketplace model.

What Are the Benefits of Operating a Marketplace for B2B Businesses?

If armed with the right marketplace features, enterprises that successfully launch and grow their own marketplaces can look forward to several main benefits:

• Less capital risk: Marketplace operators don’t need to hold any inventory, so they’re able to tweak or expand their product catalogs without major upfront investments in warehousing, research and development, or production.
• Increased customer reach: A single-vendor online store has to rely on the operator’s customer base. Because a marketplace brings on third-party vendors, the operator gets to tap into new customer bases.
• The flywheel effect: First laid out in the book Good to Great, the flywheel effect is a concept of perpetual growth. Here’s how it happens in a marketplace: as a marketplace attracts more customers, it attracts more sellers, who in turn add their own customer bases to the mix, and so on.  
• Supplier enablement: An online B2B marketplace creates more value for suppliers by enabling them to reach more potential customers, access valuable data, and offer a seamless buying experience to their customers. 

Now that we’ve highlighted some of the benefits of the marketplace model, we’ll go over the most important marketplace features to consider before launching your own B2B marketplace.

6 Essential Features of a B2B Marketplace 

To operate a successful B2B marketplace, the platform you use must cater to all the stakeholders involved: buyers, sellers, and operators. 

Seller Features

Without the right seller marketplace features, you won’t be able to attract, maintain, and expand a healthy roster of third-party vendors. Here are a couple of key marketplace features needed to cater to sellers. 

Vendor management

This spans vendor selection and onboarding, vendor dashboards, payouts, shipping, and more. Your marketplace platform should be easy for vendors to use every step of the way — from onboarding to analytics to payouts.

The more you can automate when it comes to vendor management, the better. For example, vendors should be able to upload their existing catalogs without having to manually input product details again. 

🔵 Read more about vendor management best practices 🔵

Contract lifecycle management (CLM)

CLM encompasses the tracking and management of vendor agreements, including commission fees, payment processing, product listings, and customer service.

The agreement between the seller and the platform is essential to ensure both parties understand their responsibilities and obligations. It also provides a clear and transparent commission structure. 

Contract lifecycle management allows you to control permissions that all your vendors have within the ecosystem while keeping track of any changes. 

A built-in CLM system is a must-have marketplace feature that can help automate the creation and approval of vendor contracts based on specific criteria and streamline your agreements in one place. 

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Buyer Features

Happy sellers are only part of the equation. The buyer’s experience must be convenient and frictionless, too. After all, if a buying experience doesn’t meet the needs of customers, they’ll go elsewhere. These marketplace features help create a more seamless buying experience. 

Product information management (PIM) 

Multiple third-party vendors uploading product catalogs — each with unique product photos and write-ups — can result in messy data, and that’s a costly mistake. There are several reasons it’s important to have accurate and comprehensive data on your commerce site: 

1. Searchability: The right data allows buyers to more easily find what they’re looking for.
2. Expertise: Displaying the right product information demonstrates a certain degree of expertise. If your marketplace isn’t using the same language as your customer to describe the products listed, there’s a degree of credibility that’s lost. 

Ensure your platform has a PIM system in place to maintain consistency and quality across catalogs. Any PIM capabilities that empower you to easily set and categorize attributes, product types, categories, and collections are valuable for a B2B marketplace.

Order management system (OMS) 

Order management can get complicated quickly when it comes to B2B purchases. For example, in one order, you can have purchases from multiple vendors. How do you communicate the right details on the front end and keep track of the right details on the back end — including everything from fulfilling the order correctly to payouts? 

OMS is a powerful B2B marketplace feature that allows you to track orders and support processing, accounting, and fulfillment across multiple vendors. Buyers want a transparent ordering process and to be kept in the loop as their order moves along the pipeline. 

Operator Features

As a marketplace operator, you have a lot to think about. There are a few features you should always look for to ensure your B2B marketplace can operate smoothly. 

Payment orchestration

The marketplace payment orchestration layer (POL) helps create a frictionless checkout experience for buyers and helps operators comply with regulations, prevent fraud, payout vendors, and enable a wide range of payments. 

Your POL should simplify your ability to:

• Capture payments from customers: This should take into account product price, shipping, taxes, applicable fees, and any discounts. 
• Accept multiple payment formats: Otherwise known as payment optionality. You need a marketplace platform that can process transactions in a variety of different formats beyond credit cards. For example, in B2B transactions, options like bank wires and checks are commonly used.
• Payout commissions to vendors: A marketplace platform must have the ability to split commissions within a single transaction when a buyer’s order involves multiple vendors. It should also be able to follow commercial terms, such as payment within 30 days, and account for different currencies. 

Logistics orchestration

Marketplace logistics is an often forgotten aspect of multi-vendor commerce. What happens after a purchase is made through your marketplace? The operator needs to notify the seller, the seller prepares the order, the seller communicates shipping details with the operator, the operator communicates those details with the buyer, and so on. There’s a lot that goes into logistics, and thereby it’s essential to look for the right features to help you run your marketplace logistics smoothly. This includes: 

• Warehouse management: A warehouse management system lets a marketplace operator assign and track inventory levels across various locations. Single-vendor commerce platforms tend to put low caps on the number of possible warehouses, whereas a good multi-vendor marketplace handles unlimited warehouses — and has the tools powerful enough to manage them.
• Inventory management: With multiple sellers — and each potentially maintaining multiple warehouses — how do you keep track of what’s in stock and what’s not? An inventory management system is a marketplace feature that lets you automatically understand what’s available and from which warehouse.

Choose a Platform with the Right Marketplace Features 

Ensure your B2B marketplace has the right features to enable a seamless experience for sellers, buyers, and operators alike. When choosing a marketplace platform, make sure it has been tailor-made for B2B marketplace operations.

🔵  Want to know what else to consider when building a multi-vendor marketplace? Download this key decisions checklist (it's free). 🔵