Developing Marketplace Strategies to Best Serve the Customer
(Image source: statista.com)
B2B ecommerce sales in the US are projected to reach nearly 1.2 trillion dollars by 2021, giving B2B organizations lots to think about when it comes to embracing the trend towards the consumerization of the B2B space.
Online marketplaces are starting to be a big driver for ecommerce sales in B2B. Already well-established in the B2C environment, the entry of big ecommerce players - most notably Amazon - into the B2B segment is resulting in rapid ecommerce growth.
Amazon Business has been online since December 6, 2016, providing both buyers and sellers - as its advertising slogan attests - with "Everything you love about Amazon. For your business." Essentially, Amazon Business - plus others including ThomasNet, Alibaba, eBay Business Supply, and many more besides - provides an online marketplace that acts as a web-based hub, where various organizations such as buyer and seller companies, importers, exporters, retailers, wholesalers, etc. are able to connect with each other for selling and buying products on one centralized platform.
Driven by the convenience and seamlessness of the B2C shopping experience, more and more B2B buyers are now demanding a comparable business shopping experience as well. As such, there is a growing digitalization of the B2B customer journey, rendering B2B marketplaces more and more relevant as time goes by.
However, many B2B organizations are torn between selling their products on marketplaces in order to make them more available and visible to their customers, and staying off them, concerned that the investment required may not be worth it.
It's certainly true that for a traditional company with years of experience doing business in the traditional way (catalogs, phone calls, stores, warehouses, sales forces on the ground), introducing a new sales channel presents a challenge. Enabling online sales requires company-wide changes and reorganization that will impact every organizational unit from procurement to warehousing, fulfillment, operations, sales, marketing, accounting, management, and many more besides.
Nonetheless, there are many advantages of selling on B2B marketplaces that cannot be overlooked.
The Advantages of Selling on B2B Marketplaces
For starters, selling on marketplaces negates the need for sellers to develop their own ecommerce platform - which could take months or even years to complete and could be very expensive. Instead, sellers can simply open an account on the marketplace, load up their product information, and start selling in a relatively short period of time.
Marketplaces also give sellers access to an already-engaged audience, meaning that they don't have to spend time and money building up an online audience themselves. Being present on a marketplace immediately expands a seller's reach to new customers, often on a global scale. This can be great for testing out new products with different markets, and the beauty is that you can add or remove products - depending on how well they fare - from the marketplace at any time.
Other benefits include gaining access to tried and tested infrastructure and ecosystems. In terms of Amazon Business, for example, this includes a whole spectrum of additional service functions such as Amazon Marketing Services (AMS) and Fulfilment by Amazon (FBA). Combined with high sales potential generated by a large international customer base, all these advantages make for great growth opportunities which B2B organizations can leverage.
Developing a Marketplace Strategy
There is no one-size-fits-all approach for marketplaces. Each company in the B2B industry is different and offers very different products often to very specific customer segments. This means that the first step in developing a marketplace strategy involves choosing the right one/s to sell on that will best serve the target customer - today, there are many options available, some of which serve broad audiences, others that serve a niche market.
Combined with this should be a market potential analysis, where an estimate of revenue potential is made based on data-driven market intelligence with real transaction data. A worthwhile marketplace strategy can only be developed where sufficient sales potential can be identified using hard numbers, data, and facts as the basis.
From here, the next steps will involve negotiating with the marketplaces that suit your company's needs over prices and terms as well as deciding upon and developing an organizational unit that will oversee marketplace sales, marketing, and all other associated activities.
Success in a marketplace will only be achieved when a strategy is developed that covers these core elements in full.
Final Thoughts
Though there are many advantages, selling on B2B marketplaces doesn't come without its challenges. Expanding to more sales channels will inevitably make your business more complex in terms of managing your product listings (across the marketplace, your print catalogs, and your own ecommerce store if you have one), inventory management, and suddenly having to abide by a new set of rules as imposed by the marketplace.
What's important is that you do your research and have a strategy in place to deal with any difficulties that may occur at any time. Many B2B organizations selling on marketplaces are managing to expand their businesses and sell more products to more customers. However, whether you decide to enter a marketplace or not, it must be a fully-thought-out and strategized decision, for today, no company has the option of remaining complacent when the likes of Amazon are rapidly encroaching on their space. Manufacturers and distributors need to have a carefully thought out plan for how to deal with marketplaces - even if they ultimately decide not to enter one - otherwise, better-prepared companies will come along and snatch their customers sooner or later.
B2B marketplaces will be a hot topic at B2B Online Miami 2018, taking place this November at the Turnberry Isle, Miami, Fl.
Download the Agenda today for more information and insights.