What is
B2B Marketplace
?
B2B Marketplace Definition
A B2B (business-to-business) marketplace connects buyers and sellers of products or services for wholesale transactions. Unlike consumer marketplaces like Amazon or eBay, B2B marketplaces are geared towards businesses rather than individuals.
In these marketplaces, businesses can find new suppliers, compare offers, and easily purchase the products or services they need in bulk. B2B marketplaces offer a range of benefits, including a wider selection of products, streamlined procurement processes, and lower prices due to increased competition.
Keep reading to learn about:
Why do you need to know about B2B marketplaces?
As online consumers, we’ve become accustomed to extreme levels of convenience while shopping on the web, often referred to as “Amazon-like” experiences. So when it comes to making business purchases, they demand similar degrees of ease and efficiency from the platforms they use.
The popularity of B2B marketplaces reflects this shift. In 2023, B2B marketplace sales surged by 100% according to a report by Digital Commerce 360. This growth is driven by buyers’ increasing needs for streamlined, flexible purchasing options that only B2B marketplaces can provide.
Companies that adopted the B2B ecommerce marketplace model have subsequently reported impressive, tangible results. A study by Forrester Consulting, commissioned by Nautical, found that such companies experienced:
- 44% increase in customer acquisition
- 42% boost in revenue
- 36% rise in average order value (AOV)
What are the benefits of starting a B2B marketplace?
At its most basic, the business case for B2B marketplaces is that they allow you to offer more diverse product selections to your customers by aggregating multiple vendors into a one-stop-shop. This increases your market share while driving higher customer engagement and satisfaction. B2B marketplaces, when managed well, can also improve your overall operational efficiency and provide a solid foundation for future growth.
Reach more customers
When you offer a wider variety of products and services, you attract more buyers to your platform. A B2B ecommerce marketplace expands your customer base by drawing in a broader range of buyers to the multiple vendors you host. This diversity appeals to different segments, helping you reach customers who may not have initially associated your brand with a particular purchase.
Higher average order value
B2B marketplaces often see higher average order values due to the sheer variety of products for sale. When buyers can easily find complementary products and services without leaving the marketplace, they tend to make larger purchases overall. Savvy B2B marketplace operators take advantage of this with prompts, such as “customers who bought this item also bought…”
Provide a better buyer experience
Many buyers prefer having a single point of sale where they can compare products, read reviews, and process their payments. A well-structured B2B marketplace offers all of these in a seamless and efficient environment that doesn’t confuse customers in the process. When a customer has an easy and reliable experience on your platform, they’re more likely to come back.
New revenue channels
B2B marketplaces open up many new revenue streams, such as those from transaction fees, subscription models, and offering value-added services. By facilitating transactions between vendors and buyers, you capture a portion of their sales. Providing premium services like analytics, advertising, and logistics support can be very attractive to B2B businesses. This income diversity improves (and helps stabilize) your marketplace revenue.
Less capital risk
B2B marketplace operators don’t need to hold any inventory from third-party vendors, so you’re able to tweak or expand your product catalogs without major upfront investments in warehousing, research and development, or production. This has the benefit of increasing your business’s agility in the face of unexpected shifts in market trends, making your revenue more resilient in the long term.
Examples of successful B2B marketplaces
It pays to study the successes of others. Here are three B2B marketplace examples that make for excellent case studies:
Alibaba
Alibaba has become a global leader in B2B marketplaces by offering a vast array of products from manufacturers around the world. Its success stems from its ability to connect businesses across borders, providing a platform that supports large-scale transactions, bulk purchasing, and a very diverse product catalog. Alibaba’s user-friendly interface and robust logistics network further enhance its appeal, making it a go-to platform for businesses looking to source products internationally.
Amazon Business
Amazon Business has the enormous advantage of Amazon's existing, extensive logistics and technology infrastructure to serve its B2B market. It offers businesses access to a wide selection of products, competitive pricing, and features like multi-user accounts and purchase analytics. Its success lies in replicating the seamless consumer experience that Amazon is known for and that customers are already familiar with, while adding B2B-specific functionalities that cater to the needs of corporate buyers, such as invoicing and bulk discounts.
ThomasNet
Unlike the other two, ThomasNet’s strength lies in the specificity of its product catalog, not its extensiveness. ThomasNet’s B2B ecommerce marketplace focuses on industrial products and services. The platform boasts deep, specific industry knowledge and an ability to connect buyers with trusted suppliers. Their detailed product catalogs, supplier reviews, and advanced search capabilities make it a go-to for procurement professionals in manufacturing and engineering industries.
B2B marketplace software
Operating a B2B marketplace requires specific platform capabilities that first-party B2B ecommerce websites just can’t provide. That’s where B2B marketplace software comes in. Right out of the box, these software offer levels of control essential to marketplace operators.
When launching a new B2B marketplace, keep these software requirements in mind:
Multi-vendor checkout
This feature allows customers to purchase from multiple vendors in a single transaction. It simplifies shopping by consolidating various products into one checkout process, an absolutely crucial part of the online marketplace customer experience.
Scalability
As your marketplace grows, the software needs to be able to handle increasing numbers of vendors, products, and transactions without compromising performance. Scalability ensures that the platform can support your business's expansion plans and adapt to market changes.
Reporting: for both the merchant and the vendors
Comprehensive reporting tools are necessary for gauging and improving marketplace performance. Operators need insights into overall sales trends, customer behavior, and revenue, while vendors require data on their own sales, inventory, and customer feedback. Effective reporting helps everyone make informed decisions.
Financial management
B2B ecommerce marketplace operators need to be able to juggle complex financial transactions between multiple parties, including taxes and other fees, and they need to do so seamlessly. Robust financial management features built into the platform should give you the ability to manage payments, commissions, refunds, and payouts to vendors.
Integrations
Integration capabilities enable marketplace software to connect with other systems, such as ERP, CRM, inventory management, and shipping solutions. A platform that can seamlessly integrate with your preferred tools will be a huge benefit. Ultimately, you want to ensure that data continues to flow smoothly between your teams internally and externally between vendors and buyers.
Enhance your business with a B2B marketplace
The boom in B2B marketplaces is transforming the way businesses conduct wholesale transactions, setting ever higher expectations for convenience, efficiency, and access to a broader range of products and services. By leveraging specialized software features, businesses can effectively manage these multi-vendor environments, leading to significant growth, operational agility, and robust revenue streams.