Choosing the right B2B marketplace for your business
So, you’ve decided to market your businesses products and services through a business-to-business (B2B) marketplace, but of the available options, how do you decide which to go for?
What are the advantages to using an online B2B marketplace and how do they differ? We delve into this and highlight the important features you should look for when choosing a B2B marketplace.
A B2B marketplace connects buyers with suppliers. B2B marketplaces provide a means to helping reach new customers and promote your products or services in a different way to your other marketing strategies, expanding your current sales channels. Buyers (businesses) can connect to brands, manufacturers, wholesalers and other suppliers through one online channel. Similar to a business to consumer (B2C) marketplace like Amazon, however, the ‘sellers’ are the suppliers, manufacturers and wholesalers who sell to the other business buyers requiring a product or service.
Types of B2B marketplace
There are two main types of B2B marketplace, choosing the right type for your business is vital. A Vertical B2B marketplace permits the buying and selling of products in a particular industry or sector. For example, a freight marketplace will connect you with businesses that can fulfil your freight requirements. Horizontal B2B marketplaces, such as Applegate, connect buyers and suppliers across various industries or sectors, providing access to a range of businesses to fulfil all of your purchasing needs.
B2B marketplace business models
The three most common B2B marketplace models are:
- Commission based – For each successful order through the marketplace platform, the seller pays a commission to the marketplace operator.
- Subscription-based – The marketplace charges a membership fee (usually annually) for suppliers to promote their business and get matched with buyer requests. Often with added value incentives such as account management and advertising features for greater exposure.
- Listing fee - Sellers pay an extra amount as a listing fee for posting a product to sell.
What are the advantages of using an online B2B marketplace for your business?
It’s said that B2C eCommerce is still very much ahead of B2B eCommerce, and a simplified proposition. However, there are some obvious advantages of using online B2B marketplaces. According to a blog post by alibaba.com, currently 75% of B2B purchases are made online and this figure is expected to have increased due to the effects of the pandemic. More and more businesses are utilising online channels for their purchasing and procurement needs.
We've listed some of the benefits of using a service marketplace below:
- B2B marketplaces allow buyers to streamline their procurement process and make substantial cost reductions whilst strengthening their supply chains.
- Suppliers gain access/are connected to an increased number of prospects and clients than they could source themselves online, or contact directly over the phone, saving valuable time.
- Suppliers are introduced to a new source of buyers from all over the globe, providing new revenue streams and increasing their customer base.
- Buyers are verified (in most instances), reducing risk and ensuring any transactions made run smoothly.
- Buyers using a B2B marketplace know the product or service they require and have serious intent to make a purchase.
- Buyers get the ability to directly compare multiple quotes from relevant suppliers, all in one place.
- Suppliers receive access to a network of buyers, usually as part of an annual membership. A small investment to reach a wider audience, compared with other possible marketing streams.
- Response rates on both the buyer and supplier side are likely to be higher between like-minded businesses looking for new business opportunities compared to a random internet listing for example – making for improved customer experience on both sides.
- Opportunities for suppliers to increase their SEO rankings. Many B2B marketplaces offer access to keyword campaigns, allowing them to take advantage of the marketplaces search engine strength and route traffic to their own website or content with minimal effort.
- For suppliers, joining a B2B Marketplace offers a tool for marketing and branding. For many small businesses, there are often constraints when it comes to marketing and advertising budget, however, a B2B marketplace allows suppliers the opportunity to showcase their businesses products and services through their own ‘profile’ or business listing.
Things to consider when choosing the right B2B marketplace for your business:
- Geographical boundaries – are there any? Will your business have the potential to reach business and organisations globally, or are they restricted to specific geographical locations?
- How many other businesses are the marketplace inviting to quote on a job? Are you competing against such a high number of other businesses that it makes winning new business difficult or not worth your time?
- Ensure the business model works for you and familiarise yourself with the terms of the contract.
- Communication and transparency – will you have access to communicate with buyers directly?
At Applegate, we help thousands of active supplier members across many industry sectors. From routine purchases to extraordinary one-offs, in quantities from single units to millions, we have a broad portfolio of suppliers in our network of over 140,000.
As your procurement and purchasing partner, we can save you the time and hassle of finding reliable buyers for your business.
If you’re considering joining an online B2B marketplace, Applegate can provide you with free quote alerts. Each time we receive a request from a buyer that is relevant to your business or organisation, we’ll notify you by email – providing you with a real sense of the type, quality and quantity of requests in your sector or industry.