What Exactly is a B2B Marketplace And How You Can Successfully Sell On It

08/27/2021

Global business-to-business (B2B) eCommerce transactions totaled US $12.2 trillion in 2019, according to a Statista report. Estimated B2B e-commerce marketplaces GMV worldwide is 31.19bn USD. B2B e-commerce is a major sales channel in digital commerce. Changes in buyer behavior due to the pandemic will continue to drive adoption further beyond 2021.According to forecasts made by Statista, the sector of food and cosmetics was projected to experience the largest increase among the different categories, with a growth of roughly 56 percent in 2020 and 33 percent in 2021 in Africa. As the trend continues to grow, it represents a huge opportunity for traditional B2B wholesalers and distributors to embrace the online marketplace model in order to get ahead of their competition.

 In this post, we’ll provide an all-encompassing rundown of B2B Marketplace, including an explanation of why selling on B2B Marketplaces is important, how to successfully sell on a B2B Marketplace, and suggestions if you’re new to B2B Marketplaces.

What Is A Marketplace?

An online marketplace is a type of e-commerce site that connects those looking to provide a product or service (sellers) with those looking to buy that product or service (buyers). These buyers and sellers may have had trouble finding each other before, and thus the marketplace creates efficiency in an otherwise inefficient market.

Depending on the different natures of B2B selling, a B2B marketplace can also be called other names, including a B2B trading platform, B2B procurement or sourcing website, B2B portal, multi-vendor marketplace, B2B catalog and directory, and more. 

What exactly is B2B

Before we get into more details let’s first describe what B2B means;

Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business refers to business that is conducted between companies, rather than between a company and individual consumer.

 If you are involved with an SME (mid-size enterprise), it is highly likely that you will interact with a B2B company at some point in your business life. That’s why it’s of high importance to gain a better understanding of the principle.

 

History of B2B Marketplaces

The development of B2B electronic commerce took place in three, partly overlapping, stages. Stage one was the Electronic data interchange (EDI), which realized the standardized, bilateral exchange of business information (e.g. orders and requests for products) electronically. 

The Internet made Internet catalogues, which were the second stage of the B2B Electronic Commerce’s development, possible. Companies were able to present information on their products via the Internet. Prospective buyers had permanent access to actual data. Supporting business transactions with Internet catalogues was given special emphasis until 1999.

The third and present stage of B2B EC (since 1999) are electronic markets (e-markets). E-markets are “virtual rooms” in which different participants are able to interact via the Internet. Several buyers, sellers and service-providers have access to the e-markets.

Alibaba.com launched in 1998 in Guangzhou by Jack Ma (former English teacher), Alibaba.com started off by enabling Chinese SMBs and wholesalers to find clients overseas. It was the first online B2B Marketplace to sell products online. Today, there are many B2B Marketplaces. Let’s look at their examples 

Examples of B2B marketplaces

There aren’t a lot of notable B2B marketplace platforms out there today, mainly due to the intricacies of building the technology and gaining a trustworthy reputation over years but here are some of them. If you are an SME, you may have engaged with one of these B2B sites;

Alibaba.com based in China

Suubula.com based in Uganda

IndiaMart based in India

EC21 based in South Korea

ThomasNet based in United States

Amazon Business based in United States 

Types of B2B Marketplaces

Vertical marketplaces

A vertical marketplace is a business model that caters to a niche market or industry. In this case, the sellers offer goods and services specific to a single market sector/category with a specific target audience. 

Horizontal marketplaces

Horizontal marketplace facilitates the need for a wide range of customers across a different sector of the economy. It is not mainly focused on a specific category of items to sell but sells almost everything thus, reach a broader audience 

Local Vs Global Marketplaces

We shall differentiate between the two in terms of geography. Local marketplaces are those focused on supplying their local markets while Global marketplace companies facilitates on exchange of goods with no geographical boundaries 

Marketplace Models 

There are many marketplace models depending on the vision of the marketplace but the models below are the most popular ones

Commission based model

The most popular business model for modern marketplaces is to charge a commission from each transaction. When a customer pays a provider, the platform facilitates the payment and charges either a percentage or a flat fee. 

Subscription fee based model

A membership fee (sometimes called a subscription fee) is a revenue model where either some or all of a marketplace’s users are charged a recurring fee to access the marketplace. 

Listing Fee Based Model

This model is typically used when providers get value based on the number of listings they have on the site, and the potential value per listing is big.  

B2B compared to B2C and P2P 

To further describe what a B2B company is, it is essential to compare it with other types of sales such as B2C and P2P

P2P (peer-to-peer)

 This is a grassroots transaction where private individuals sell their goods to peers.

B2C (business-to-consumer

 The term business-to-consumer (B2C) refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies. 

Why Should You Sell On a B2B Marketplace

COVID-19 has massively affected the traditional SMEs' buying and selling process. Trade fairs have been canceled or suspended, and business travel significantly reduced. To secure new business, especially in new overseas markets, SMEs are turning to e-Commerce platforms that enable visibility to potential customers and business partners.

Let’s look at benefits of selling on a marketplace

Build Your Online Presence

Building an online brand is one of the biggest challenges faced nowadays by SMEs. Some SMEs have established eCommerce stores, but small companies may be unable to start online stores due to limited resources.

As part of a B2B marketplace, you save both the time and money you’d spend building your online store.B2B marketplaces have already done the groundwork. Most of the B2B marketplaces are search engine optimized, which provides better visibility for your products. All you need to do is create your account and add your products. Then you can start selling immediately. This whole process takes just a few hours. 

Save time and money and start selling online

Reduce operational costs

Marketing and promotional activities are one of the highest costs for any business owner. You can reduce these expenses by being part of a B2B marketplace. Once you become a member of any B2B marketplace, you can create online catalogs to promote your products. You need not print product catalogs or spend money on traditional marketing channels to promote your products. Most of the marketplaces require a small subscription fee for membership and these costs are very affordable for a business owner 

Very easy to set up

You don’t need to worry about using a B2B Marketplace because it is as easy as using a social media site. Sites like Suubula are really to use, create an account and you are ready to start selling. More so we support you during the entire process. 

Test New Products

Innovating new products is very important for the growth of any business. Even if your product is extraordinary now, over time your customers may outgrow your products. So you need to improve your products continuously. 

B2B marketplaces are an ideal place for you to try your new products. You can sell newly launched products or offer free samples to your customers to test new ideas. You can also request your customers share feedback and reviews to get a clear picture of where your products stand . Feedback from customers helps you make informed decisions and get ahead of the competition. 

Enter new markets

As a result of the pandemic, businesses have shifted online and are looking to use B2B e-Commerce platforms to connect with customers and sellers. Being on a marketplace as an SME helps you expand your customer base to internet users – a benefit that will continue to apply as and when COVID-19 is brought under control. 

Access new supplier bases

COVID-19 has disrupted supply chains, making B2B platforms even more crucial for business continuity. SMEs can look to B2B e-commerce platforms for a larger pool of suppliers — online transactions will make geographical location matter less.

Streamline existing processes with the ability to assess new partners and suppliers through trusted echo-system

A B2B eCommerce platform streamlines and automates existing processes, largely eliminating human error and increasing transparency and efficiency. Integrating other functions such as customer relationship management (CRM), shipment, and payment solutions, this will help SMEs save time on administrative matters and be better able to focus on growing their business. This is what Suubula has done at it’s core.

How to succeed on selling on a marketplace

We’ve talked about the definition and types of B2B marketplaces. We’ve also explained the benefits of selling on a B2B marketplace. But here are some of the strategies you can put in place to succeed selling on a B2B marketplace

Build trust

Do all steps necessary so the buyer on the other side of the Country who never meet you in person will believe in you. This includes:

Completing your company profile

Showcasing other information that authenticates your business, such as certificates, awards, or photos of your factory, office, and employees. 

Post and manage products

High-quality product posting helps you stand out from the crowd. Use descriptive keywords in your product name/title and descriptions to optimize for rankings within the B2B marketplace platform. Use well-designed images and videos to attract buyers and help them develop a holistic understanding of your products.

Be flexible and adaptive

Flexibility will enable your business to thrive and evolve. Staying in touch with and adapting to your customer’s needs will give you a unique advantage. Such flexibility may include offering product customization, price modification, and personalized responsive services.

 Offer logistics and customs clearance advice

Make sure that you can advise your customer on the best way that you can deliver the product. Also, you can help customers gain knowledge of the rules and regulations required for the products to be exported into certain countries.

 Respond to inquiries

Without inquiries, there can be no orders. So always make sure that you deal with inquiries in a professional, organized, and timely fashion.

Offer sample products

Potential customers may prefer to check the quality of a product before making a bulk order. You can facilitate this by offering a product sample. 

Respect your potential buyers

You will have to show respect, professionalism, and interest to any business regardless of the size of the company that contacts you. After all, if you serve them well you will grow together! 

 Key Takeaways of Using A B2B Market Places

  • B2B marketplaces provide you access to a vast market in your country at a reasonable cost. 
  • Achieve operational efficiency at a lower cost with B2B marketplaces.
  • With B2B marketplaces, you save the time and money you’d spend on building your online presence and gain trust fast. 
  • B2B marketplaces help you to build your online brand and get better visibility for your business.  
  • View real-time insights on products that help you make significant business and investment decisions through your B2B marketplace
  • These B2B platforms will continue to be essential for SMEs even after the pandemic ends, with businesses and customers able to conduct 24/7 cross-border transactions rapidly and seamlessly
  • Suubula.com helps SMEs establish their online presence, build a brand, test new products, make informed decisions and improve operational efficiency for your business


Conclusion

The competition is getting fiercer within the B2B space, while the opportunities are vast. For many, selling on a B2B eCommerce marketplace is a great way to expand your B2B network and grow your sales. It can be especially helpful for SMEs who have a limited marketing budget to gain the best possible results in the short- and medium-term.

 

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