What Is a B2B Marketplace

If you’ve been recently interested in B2B ecommerce, you’re not alone. In fact, the industry has seen remarkable growth over the past few years. According to Forrester, US B2B ecommerce transactions are expected to reach $1.8 trillion by 2023. The pandemic has certainly spurred the pace of digital adoption and brought massive dislocations in the business fabric, prompting B2B companies to look for digital channels to boost their sales. Here we present the general guidance for anyone interested in B2B ecommerce and B2B marketplaces in particular: even those who are familiar with B2B will hopefully discover something new.

1. WHAT IS B2B?
2. B2B COMPARED TO B2C, C2B, AND C2C
3. WHAT IS A B2B MARKETPLACE?
4. TYPES OF B2B EMARKETPLACES
5. B2B MARKETPLACE FUNCTIONS
6. BENEFITS OF USING B2B MARKETPLACES FOR BUSINESS
7. HOW TO SUCCEED IN A B2B MARKETPLACE
8. STRATEGIES TO PROMOTE B2B MARKETPLACE
9. COMPARISON OF B2B MARKETPLACES
10. COMPARISON OF B2B MARKETPLACE PLATFORMS
11. B2B MARKETPLACE VS B2B PLATFORM
12. KEY TAKEAWAYS | BENEFITS OF USING MARKETPLACE SOLUTIONS LIKE VITRO COMMERCE
13. FAQ

B2B or business-to-business is an arrangement where one business makes a commercial transaction with another business, which typically occurs when a business sources materials for production, employs the services of another business, or re-sells goods and services produced by other businesses.

B2B is often compared to B2C, or business to consumer; however, in B2C, a business sells products or services to a consumer rather than a company. 

If in B2B, the involved parties typically have equal negotiating power that oftentimes includes legal counsel to arrive at an informed decision, in B2C, on the contrary, decisions are affected by information asymmetry. Unfortunately, however, economic equality within B2B is not a ubiquitous phenomenon: larger companies tend to have commercial and informational advantages over smaller players. 

When comparing the B2B to B2C shopping behaviors, the former is generally thought to be driven by the need, whereas the latter, by expectations, something we’ve extensively covered in our previous piece on Personalization. Among other notable differences between the two business models are the sheer volume of transactions and the amount of an average check, which is significantly higher in B2B than in B2C. 

C2B, or consumer to business, is a business model where, instead of a business creating value, it’s the consumer who does. An example of a C2B arrangement might be situations when consumers suggest ideas that are later adopted by the business, or when consumers offer products and services to companies. C2B can oftentimes be observed in blogs and forums where consumers link to products on Amazon and suchlike websites to facilitate the purchase of those products, thereby earning an affiliate revenue in case of a successful sale. 

C2C, or consumer to consumer, is a business model whereby customers, or individual consumers, trade with each other. Classified ads and auctions are all examples of the C2C business model. Online C2C companies include such websites as Craiglist, Etsy, and eBay.

A B2B marketplace refers to a B2B ecommerce platform that unites both B2B buyers and sellers. In contrast to a single-vendor B2B ecommerce platform, in a B2B marketplace, there are typically three involved parties, such as a marketplace operator or owner, B2B buyers, and sellers. Unlike B2C, where the buyers are consumers, in a B2B marketplace, both buyers and sellers are businesses, such as wholesalers, distributors, or retailers. Most B2B marketplaces tend to be multi-vendor marketplaces.

There are different taxonomies of business to business marketplace, depending on the business type and business model they utilize. 

Vertical marketplaces concentrate on trading in products of a particular niche or industry, such as construction materials, pharmaceuticals, or automotive parts. CheMondis is a prominent example of a vertical B2B marketplace for the chemical industry.  

On the contrary, horizontal marketplaces, do not boast of any particular specialization and sell products of varying industries instead. The most notable example of a horizontal marketplace is Amazon, which offers a multitude of products across different categories and industries and serves a wide range of buyers. 

Depending on the business model, B2B marketplaces are typically distinguished as product, service, and hybrid marketplaces. This way, B2B product marketplaces connect many businesses for product supply fulfillment, B2B service marketplaces connect companies for exchange of services, and hybrid marketplaces involve the sale of both products and services. 

The global consultancy firm Roland Berger, in turn, recognizes four marketplace models, such as the ‘one-stop-shop,’ business model transformation, procurement networks, and B2B after-sales. Since we’ve covered the above models in detail in our previous piece The Marketplace Revolution, we’ll just brush over them here. 

One-stop-shop broadens a company’s activities (either vertically or horizontally) and enables a smooth transition from an online shop to a B2B ecommerce marketplace. One-stop-shops typically monetize on subscription, transaction, or marketing fees. 

Business model transformations are marketplaces that initially started off as B2C but expanded their offering and partnership network to include B2B ecommerce.

Procurement networks are member-only clubs with a limited number of partners and subsidiaries that unite their efforts to support one or more procurement processes.

B2B after-sales marketplaces are marketplaces that provide after-sales support such as maintenance, repair, warranty, etc.

Besides providing goods and services to the business buyers, enterprise marketplaces serve other important functions in the businesses’ supply and value chains. Here’s the list (by no means exhaustive) of those important functions:

A B2B marketplace refers to a B2B ecommerce platform that unites both B2B buyers and sellers. In contrast to a single-vendor B2B ecommerce platform, in a B2B marketplace, there are typically three involved parties, such as a marketplace operator or owner, B2B buyers, and sellers. Unlike B2C, where the buyers are consumers, in a B2B marketplace, both buyers and sellers are businesses, such as wholesalers, distributors, or retailers. Most B2B marketplaces tend to be multi-vendor marketplaces.

B2B marketplaces help the demand and supply to connect and transact at the accurate market price by matching sellers and buyers automatically, allowing buyers to pick up their preferred suppliers, or by allowing both parties to discover each other independently. Moreover, B2B marketplaces facilitate payments between the parties by offering multiple payment options, including trade finance.

Support for fulfillment including warehousing, packaging, delivery, returns, customs handling, and inspections. While not all, some B2B marketplaces offer fulfillment services on top of their common value proposition.

Enterprise marketplaces can repackage vast amounts of accumulated data and sell it to interested parties. They can also open up access to it for free to incentivize the sellers, enable better transparency, and help marketplace participants to make better decisions.

B2B marketplaces offer ample advantages for all involved parties. 

Firstly, they improve access to both quality information and quality merchandise. This way, smaller players have opportunities to trade next to larger international corporations. For buyers, a juxtaposition of regional, specialized, and international players means that they can now access a better offering that would have otherwise been unavailable. In a similar vein, by operating a marketplace, owners can reach new markets, extend their customer base, and unlock new, previously unfathomed revenue streams. Also, by connecting more vendors, marketplaces can significantly extend their offering, which, in turn, contributes to website traffic and increase in search engine rankings. 

Moreover, marketplaces empower buyers to comparison shop entire inventories across different industries and refine their search by different criteria. 

By adding products from multiple vendors into their carts, and thereby minimizing the number of invoices it takes to process the order, buyers also inadvertently participate in improving sales and fulfillment efficiency. 

Since marketplaces combine the efforts of different parties, they tend to be much more efficient than if the participants had been operating independently. B2B marketplaces also streamline and expedite the buying process through payment and fulfillment facilitation, contributing to customer satisfaction and loyalty. Such efficiency translates into more sales and revenue for both marketplace operators and sellers.

And finally, the marketplace model allows for testing new business concepts without running into additional unforeseen risks, such as incurring costs of holding on to unsold inventory.

Learn more about pros and cons of B2B marketplaces here: Top Pros & Cons of Building a B2B Marketplace.

To make the B2B marketplace model work for your business, it’s worth adhering to a few common-sense principles.

1. The most important thing is to choose the right B2B ecommerce platform. It has to be an API-powered, headless, composable, and extensible solution for you to enjoy all the benefits of ecommerce technology and ensure your marketplace performs at its best.
2. Invest time and money in good user experience, design, and localization if necessary.
3. Think of monetization strategies, such as subscription, transaction, or marketing fees.
4. Develop internal procedures for partner onboarding and provide vendors and buyers with extensive information on how to use the marketplace.
5. Verify sellers and buyers whenever necessary to ensure solvency and accountability. 
6. Employ reliable shipping and fulfillment providers.
7. Integrate with third-party systems, including internal systems of your own and those of your sellers.
8. Provide for a variety of payment methods, including trade financing options.
9. Engage in continuous feedback loops with both buyers and sellers to improve the efficiency of your marketplace.
10. Be flexible and adaptive to market changes.

While the best way to grow is always organically, it doesn’t cancel the fact that sometimes you’ll need to give your business a boost. Below, we suggest a few tips to help you promote your marketplace to get the maximum bang for your buck.

Content has a positive effect on the attitude of B2B shoppers, instills trust, strengthens the brand image, and helps potential buyers arrive at a decision quickly. Moreover, content is a fantastic and powerful tool in search engine optimization that can help your site increase its search rankings organically over time.

Online advertising, thanks to its targeting and retargeting engines, is a great way to reach a particular customer and turn an interested B2B shopper into a qualified lead. It might prove costly and perhaps, should not be used as a go-to strategy for long, but rather at the start of campaigning or intermittently.

Email marketing is a handy tool for nurturing leads and moving them down the sales funnel. If possible, segment your leads into categories and cater the message to the particular needs of each category. Message personalization is one of the most important factors in sealing a sale, so investing in designing that message seems like a reasonable thing to do.

Contrary to popular belief, social media is not a time-waster or the prerogative of B2C. Social commerce is increasingly getting traction, so maintaining a good social standing with a continuously updated social media page is absolutely imperative.

A prospect is more likely to get back to you if your website has been recommended by the person’s colleagues or friends, so it makes perfect sense to ask your partners to share your content, suggest a person you might contact at another organization, or encourage your partners to refer others to your business.

Despite the increasing popularity of B2B marketplaces, the number of successful marketplaces is not that many. We’ll run a quick overview of the few prominent B2B marketplaces below.

Alibaba is a Chinese multinational ecommerce technology corporation that provides C2C (Taobao), B2C (Tmall), and B2B (Alibaba) sales services. Alibaba is also named the fifth-largest AI company, one of the biggest venture capital and investment corporations in the world, and unsurprisingly, one of the leading global marketplaces. The organization operates a diverse and global portfolio of businesses across different industries. To put it simply, Alibaba is a sprawling network of sellers, service providers, manufacturers, logistic companies, and marketers that leverage machine learning technologies to better serve their respective customers.

DHgate is another Chinese B2C and B2B cross-border ecommerce marketplace that primarily links Chinese small and medium companies to different businesses and individuals globally. As of June 2020, DHgate had more than 2 mln sellers from more than 200 countries and regions, had more than 30 mln buyers, and listed over 30 mln products. DHgate also operates physical locations where buyers can inspect products before purchasing. Following the pandemic, DHgate was instrumental in the digitization of some of its sellers and connecting global buyers with virtual exhibitions.

Amazon is an American multinational technology company and one of the most valuable and well-known brands and global marketplaces. Despite being accused of tax avoidance, demanding work culture, and anti-competitiveness, Amazon is still considered an influential economic and cultural force. Amazon Business is specifically tailored for business purchasing and includes a unique set of features not available with a regular Amazon account. Although Amazon Business is free to join, there’s a membership fee that unlocks additional benefits for subscribers.

GlobalSources is a Chinese B2B wholesale marketplace that connects (approximately 1.5 mln) buyers from around the world with verified vendors from Asia. Besides being one of the online B2B commerce platforms, GlobalSources offers its vendors integrated marketing solutions including 13 vertical marketplaces, 13 geographic portals, electronic magazines, private catalogs, and trade shows.

TradeIndia is a B2B ecommerce trading platform catered to small businesses in India. The organization has been in the business for more than two decades: it first started as Exporters Yellow Pages in the 1990s and moved online in 1996. As of now, the portal features mostly Indian sellers (more than 40 mln vendors) and buyers worldwide trading in products across more than 40 industries and 80,000 categories.

According to its eponymous website, Made-in-China posits itself as a ‘comprehensive service platform for foreign trade,’ which features more than 40 mln products from around 30 industries across 3,600 categories. At the time of writing, the website had more than 6 mln sellers and twice as many buyers.

Worldwide Brands is an American company and web portal whose primary function is to locate and qualify factory-authorized wholesalers that are willing to sell to home businesses and small and medium-sized online retailers. The company positions itself as the industry standard wholesale and dropship directory that provides lifetime, direct access to certified wholesalers and more than 16 mln certified wholesale products.

IndiaMART is the largest online B2B marketplace. In fact, IndiaMART represents 60% market share of the online B2B Classified space in India. The website stats read 130+ mln buyers, 6+ mln suppliers, 70+ mln products and services.

Despite the increasing popularity of B2B marketplaces, the number of successful marketplaces is not that many. We’ll run a quick overview of the few prominent B2B marketplaces below.

Mirakl is one of the best-known marketplace platforms (and perhaps, the most expensive). According to Mirakl’s website, it’s the only marketplace SaaS platform that helps B2C and B2B companies launch their own marketplaces and grow at scale. Among Mirakl’s prominent clients are METRO, LeroyMerlin, Toyota, Siemens, H&M. Besides offering a fully configurable API-powered platform, Mirakl also provides for a full team of professionals who are deeply invested in the industry and boast extensive domain expertise.

Virto Commerce’s flagship product, the headless B2B ecommerce platform,an example of ecommerce asp, is an open-source, cloud-based, fully extensible, and composable solution that’s able to accommodate hundreds of business scenarios and customize according to the business needs of the customer. Because of the platform’s flexibility, Virto Commerce can accommodate a marketplace extension on top of its B2B ecommerce platform that can further scale depending on business needs. Among Virto Commerce’s clients are Bosch Thermotechnik, Lavazza by Bluespresso, Estate Spain, De Klok Dranken.

OroMarketplace is an open-source online marketplace management platform for B2B businesses, which is a part of Oro Commerce ecommerce technology products. OroMarketplace is a fully integrated digital commerce marketplace solution that is capable of operating any type of marketplace and comes with built-in CRM and diverse B2B features out of the box. Among OroMarketplace’s customers are SupplyCore, PartsBase, FoodMaven.

Spryker is a cloud native, headless, and API based PaaS solution with a modular commerce architecture. Spryker’s Enterprise Marketplace is a marketplace extension on top of its B2B ecommerce platform that offers marketplace-specific functionality, including catalogue management, merchant portal, and a back office for a marketplace operator. Among Spryker’s clients are Ricoh, Sourceability, Prym, Intersport.

B2B marketplace is essentially a B2B ecommerce platform that’s designed to accommodate an enterprise marketplace business model. A B2B marketplace can be either an extension to an existing B2B ecommerce platform or a full-service marketplace solution out of the box.

A marketplace demands a complex architecture that requires a flexible and adaptable technology solution. Virto Commerce, in this regard, is an ideal solution on several fronts:

• It is modular, meaning that the platform is extensible and modifiable – you can assemble the solution you want from the available modules like Lego or create your own modules and attach them to an existing solution. How cool is that?
• Virto Commerce is API based, meaning it can easily and seamlessly integrate with third party systems, such as ERP, CRM, CMS, PIM, and internal inventory management systems, as well as recommendation and analytics (ML/AI) engines, such as those that forecast customer demand, watch out for sales trends, check competitive prices
• Virto Commerce is cloud native, meaning it’s scalable by default
• Virto is headless, meaning you can attach as many front ends as you like to one single back end system
• Virto is flexible, meaning you can create whatever business logic you need
• Virto Commerce comes with many out of the box B2B key features such as inventory management, pricing module, catalog and product management, workflow tools, approval and permission management, among others
• Virto Commerce ensures a superior customer experience with a smooth ordering process and a seamless sales cycle

WANT TO LEARN HOW VIRTO COMMERCE CAN HELP YOUR BUSINESS? SCHEDULE A DEMO NOW!

An online marketplace is an ecommerce application that facilitates shopping from many different sources.

1. To create a successful B2B marketplace, the first thing you should do is research. As part of your research, you need to define the type of marketplace you want to start and think through the business and revenue models. 
2. During the planning stage, obtain as much information as you can regarding the software solutions on the market and choose an optimal platform that would cater to the needs of your desired business model. 
3. Start with the MVP and see how it functions and performs over time. 
4. Think through your marketing and pricing strategies, attract partners and suppliers. Ensure a smooth onboarding of sellers and buyers. Ask your existing suppliers and channel partners for recommendations and referrals. Seek companies that offer logistics, employ fulfillment and shipping providers, and ensure the seamless integration of all involved third parties.

Launch the marketplace and monitor the performance closely.

A B2B marketplace is an ecommerce platform that unites three B2B parties, that is – sellers, buyers, and a marketplace owner.

An enterprise marketplace is a B2B marketplace, meaning it’s an online platform that connects multiple vendors and buyers.

That would be silly if we don’t use this FAQ as an opportunity to promote our company, wouldn’t it? So, of course, the best B2B marketplace platform is Virto Commerce. Here, we said it!

An online B2B wholesale marketplace is a platform where retailers buy products from different wholesale suppliers.

There are different revenue models that B2B marketplaces can adopt, such as subscription, transaction, or marketing fees.

Marketplaces can be both B2B and B2C.

As mentioned above, Alibaba is a perfect example of a B2B Marketplace.

• A Vertical B2B marketplace caters to a specific audience within a particular industry.
• Horizontal marketplaces sell products to a wide range of B2B buyers across many industries.
• A single vendor marketplace is an online store where only the website’s owner sells his niche products.
• Multi vendor marketplace is a platform that connects many sellers within a shared storefront.
• A one to many marketplace (or a many to many business model) is a trading platform where all buyers and sellers transact via a single marketplace operator.
• Local marketplaces are trading platforms that cater to buyers and suppliers from a particular area.
• Global marketplaces are ecommerce marketplaces that cater to buyers and suppliers around the world.