Home Virto Commerce blog 15 Features that Distinguish a B2B Marketplace from B2C

15 differences of B2B and B2C marketplaces

While B2B marketplaces adopt certain B2C practices UX-wise, making the procurement process more natural and familiar, there are certain important underlying differences multi-vendor B2B marketplaces ignore. In short, B2B marketplaces have a more complex back end functionality that allows seamless integration with existing business ecosystems and processes.

This post will describe 15 differences that must be considered when planning the opening of a B2B marketplace.

1. Order volume

The most obvious difference is the order volume, which is always much more significant in B2B than in B2C. The order volume itself does not mean large technological differences, but it leads to certain additional services that must be employed.

2. Flexible pricing models

Pricing in B2B eccomerce is truly diverse and includes many considerations from order size and delivery timing requests to the history of customer relationships (which means the exact price cannot always be automatically computed). A B2B market place must have the tools to finetune pricing for each customer.

3. Detailed product taxonomy

Business procurers usually have very detailed specifications for the goods they want to purchase, and B2B sellers have extensive catalogs of similar products to meet such requests. In B2C marketplaces, such fine details are generally reserved for the 'description' field; in B2B marketplaces, all must have separate fields to allow comparison in the database. This means a B2B marketplace catalog structure is much more complex and detailed, and this also explains why B2B marketplaces tend to be vertical, as it is easier to create such detailed data structures for a particular market segment.

4. Payment model

In B2B, customers prefer a post-delivery payment (pay on credit). This means a B2B marketplace must provide tools as payment history, credit limits, etc. They also want to have multiple payment options; so, these must be present as well. The credit model leads to the next point:

5. Customer credibility

A B2B marketplace is not open to anyone. Each customer must pass a credibility check to make sure they are what they claim to be and can meet their payment obligations. B2C marketplaces, on the other hand, don’t check the credibility of the seller, as they usually use the pre-paid model.

6. Delivery timing

Whereas in B2C relations the delivery speed is most important, in B2B ecommerce, it is the delivery timing, as both late and premature delivery may mean losses for the customer (on warehousing construction materials, for example). The delivery timing option is a must for a B2B marketplace.

7. Checkout process and document flow

A B2B checkout is a lot more complicated than a B2C one, as it usually deals with a lot of paperwork, confirmations, and approvals. A B2B marketplace provides the tools to conduct the entire procurement operation from an initial quote request and PO to a final invoice and payment.

8. Buyer lifecycle

A B2C marketplace relies on customer acquisition, while a B2B marketplace relies on customer retention. Long-term customer relations are key to the success of a B2B business. This means a B2B marketplace must save all the transaction and communication details, order, and search history, provide an easy option to repeat orders, etc.

9. Complex relations

A B2B marketplace cannot always provide an ultimate automated solution to procurement needs. Sometimes a personal communication over traditional means (phone or email) is needed. While such communications may lead to profit loss for the marketplace, as the customer switches to buying directly from the seller, this is an important service to make the b2b platform work smoothly.

10. Vertical and regional

B2B marketplaces tend to be more specialized than B2C ones. Being vertical allows building a unique customer experience for professional buyers from a particular industry segment. Regional B2B marketplaces can offer goods with a short shelf life - for example, connecting farmers with local retailers. B2C marketplaces, on the other hand, tend to be horizontal and global, as their customers often buy on impulse; the more unconnected goods they see, the more likely they are to make a casual purchase.

11. Usually, no logistics

While B2C marketplaces often provide warehousing and logistics services to their sellers to cut delivery times, B2B ones usually leave the logistics to the seller. On the other hand, some of the specialized B2B marketplaces make logistics their selling point and profit-generating feature.

12. Multi-user accounts

A B2B marketplace usually provides multiple user accounts per customer account. This allows both procurer and supplier to distribute roles among employees and give each role a login that will enable doing a job with no risk of messing things up.

13. Software services for both supply and demand

Both sides of B2B relations are businesses, which means they both have certain business processes that can and usually are digitized. A good ecommerce platform takes advantage of this by automating certain tedious processes for its customers. With B2B marketplaces, this means providing software services not just for the seller but also for the procurer (procurement automation).

14. Extensive API usage

While a B2C marketplace may provide several APIs for its sellers to automate certain tasks (e.g., inventory management), a B2B marketplace has to have them - both for the seller and for the procurer. With APIs, customers can seamlessly integrate their existing business ecosystems with multiple B2B marketplaces to make the cooperation efficient and reap the most benefits from the B2B marketplace model.

15. Higher risk of failure

With larger order volumes and fewer customers than in a B2C sector, B2B marketplaces have a substantially higher risk of failure. If a single order on a B2B marketplace platform fails, the customers may abandon ship immediately. This means a multi-vendor B2B marketplace operator must take security, QA and customer support very seriously and invest in these accordingly.

Conclusion

The list above is by no means exhaustive, but it does indicate the main point: a multi-vendor B2B marketplace is a much more complex affair under the hood than a B2C one. While it is definitely possible to run a B2C (or a B2X) marketplace on a B2B marketplace's back end, a reverse approach (that is, creating a B2B marketplace on a B2C one's back end) will certainly result in failure.

When creating a multi-vendor B2B marketplace, it is essential to select a B2B ecommerce platform specifically designed for such a task. Virto Commerce is one such platform, being tailored for B2B needs right from its inception and trusted by multiple enterprises around the world; be sure to check out the advantages and reserve a demo.

And stay tuned for future posts on the topic of multi-vendor B2B marketplaces!

Book Your Discovery Session with Our Digital Experts

Book Meeting

Evgeny Grigul

Evgeny has more than 14 years of product & team development. Before joining Virto Commerce, he was responsible for successfully creating and delivering project management products to the marketplace by managing technical risks and opportunities.

Feb 25, 2021 • 5 min