Are B2B marketplaces right for my business?
In an era where people are glued to their phones or screens throughout the day, marketplaces have become extremely important. Not necessarily out of necessity, but instead more so out of convenience.
Amazon is a prime (excuse the pun) example of this, as they provide same or next day deliveries on numerous products that could in fact be bought locally or within a short car journey. Instead, it’s easier to hit a button and wait 12-24hrs for the doorbell to ring and the goods to be delivered.
B2B marketplaces offer a similar level of convenience, as they make business life easier. You can buy a ream of paper on Amazon or book a web developer on Fiverr, all without making a single phone call or stepping away from your desk or kitchen table. It’s that simple, that making such purchases can be done from anywhere in the world, so long as you have an internet connection.
From a seller’s perspective marketplaces can be equally as convenient, plus they’re a great extension to a sales team as they never eat, sleep or step away to use the loo, meaning your products or services and brand, are being represented online 24/7.
That said, you’ll only get out, what you put in, and if you have a poorly written profile or listing, with blurry or pixelated images, you’ll likely be overlooked.
So, what is a B2B Marketplace?
A B2B marketplace is essentially an online platform or eCommerce site where multiple businesses or vendors (sellers) can connect, collaborate and more typically sell their products or services vs. a traditional eCommerce store, managed by a single business, selling to multiple buyers.
baggl is a great example of a multi-vendor transactional marketplace, although our users behave slightly different, as they become both a seller and a buyer when they join baggl. This is because we operate a payment system that allows sellers to accrue platform tokens (kind of like digital vouchers), which they can use to buy or contribute towards other products or services they need themselves.
Something else that makes baggl unique in comparison to other marketplaces, is that our users can also sell both products and services, whereas most typical marketplaces are either service based e.g. design, marketing, software or products only e.g. electrical hardware, clothing or stationery etc.
baggl is a one stop, sector agnostic B2B eCommerce solution for all products and services. Quite a mouthful!
Marketplaces don’t always need to be transactional though. An example of a non-transactional marketplace is Findr, a global first business partnerships platform. It’s kind of like a dating or matchmaking site for businesses.
Findr provides its members with access to 400+ partnership opportunities from businesses of all sizes, from startups to global household names such as Mastercard and Uber. When they spot something, relevant members can simply request a 1hr Discovery call with a fellow vetted decision maker.
A seamless process, which cuts out the dreaded cold and generic email introductions, and unanswered follow-ups. In fact, they recently worked it out to be 9x more effective than conventional outreach methods.
One final example of a marketplace is Envato, which is where the image for this post came from. They’re a marketplace for stock videos, images, graphics and web templates, with multiple contributors, and are extremely convenient to use when it comes to creating marketing documents or video content.
How big is the B2B market?
eCommerce has been around for years, in fact it all started back in 1979 when Michael Aldrich, and English inventor, enabled businesses to sell directly to consumers in their own homes, by connecting televisions with phone lines. Granted, eCommerce has come on a little since then!
Traditionally eCommerce has been used for B2C (business to consumer) transactions, which is expected to hit rather hefty $5.55 trillion in global revenues by the end of 2022, however, in the past 18-24 months there has been a sizeable shift with businesses also using online eCommerce to sell directly to one another on a B2B basis, through B2B marketplaces.
The increase in B2B eCommerce has been so rapid, that according to Statista in 2020 it was over 5 times the size of the B2C market at a whopping $14.9 trillion and continues to grow.
Undoubtedly Covid19 has had a huge part to play in the growth of the online B2B sector, with a significant number of businesses switching to “WFH” – working from home, rather than an office. The ubiquity of mobile and tablet devices has also had a big role to play, along with humans’ insatiable thirst for convenience.
Are B2B marketplaces right for my business?
B2B marketplaces are great for all businesses, and those that disagree, will soon change their mind.
Here’s a few reasons why, which are perhaps more pertinent now, than ever, given the current state of the global economy.
- Market access – businesses can reach a broader digital market, nationally or even internationally.
- Cost effective – most marketplace fees are lower than the UK’s combined National Insurance (13.5%) and pension (5%) contributions, let alone a salespersons entire salary!
- Speed to sale – the majority of marketplaces include various automation tools and notification systems. This allows sellers to position their products or services in front of hundreds or thousands of prospective buyers in a matter of seconds.
- Payment protection – many marketplaces take payment in advance from the buyer and hold funds until the seller has delivered their product(s) or service(s). This helps protect both parties from fraud or non-payment.