Joining the online marketplace movement can help your business expand its presence in the commercial arena.
Do you want to increase your sales and profits and expand your footprint in new market segments? For most business owners, it’s a rhetorical question, but realizing it through conventional business development activities is often a slow burn.
Investing in a larger inventory is capital intensive. Hiring additional staff to recruit and win new accounts will increase your overhead and operating costs well before you start making the desired profits.
The rise of the market
A growing number of consumer-oriented companies have overcome these hurdles by implementing online marketplace technology that allows them to sell products and services owned and supplied by third-party sellers, a la Amazon and eBay.
Here in Australia, we’ve seen a range of well-known players, including supermarket giant Woolworths and outdoor entertainment specialist Barbeques Galore, create their own destination sites. Next year many others will follow suit.
Highlighting the possibility in late 2020, Gartner believed that business marketplaces represented not only a new set of technologies for driving digital commerce, but also a fundamental change in the business model for commercial organizations.
It predicted that organizations that had been operating in enterprise marketplaces for more than a year could expect to see at least a 10 percent increase in digital revenue.
B2B companies are adopting the online market trend more slowly, but that is likely to change as more companies become aware of the benefits that can come from placing themselves at the heart of a merchant ecosystem.
Embracing B2B Ecommerce
While B2B sales have historically been heavily focused on face-to-face interactions, the Covid pandemic has turned that paradigm for what seems right and seems so good. The prolonged lockdowns of 2020 and 2021 made industry roadshows, trade shows and personal selling paid, and ushered in an era of online demonstrations and electronic interactions.
Research shows that business customers are not dissatisfied with the change. According to a 2020 McKinsey research, only 20 percent of buyers were looking forward to the rep’s return. Nearly three-quarters of US companies surveyed said digital sales worked for them, and there’s little reason to believe their Down Under counterparts see things differently.
Under the line? Companies are relaxed and comfortable about spending money online for everything from office supplies to expensive factories and equipment. That means there is significant revenue opportunity for B2B companies looking to invest in creating specialized destination hubs that bring sellers and buyers together digitally.
Driving sales and growth
If you don’t know too many companies that have managed to deploy a B2B marketplace, don’t worry – it will. Skeptics on this point may find it instructive to look at what is happening in other countries.
Germany, for example, where Saitow, a company you’ve probably never heard of, runs Tyre24, an online marketplace where some 40,000 commercial customers buy tires, wheels and auto parts. It processes an impressive 100,000 transactions per day and pastes the ticket on each of them.
Steps to Success: To get the wheels spinning and match the success story of Saitow online marketplace? At Spryker, we’ve seen a growing number of B2B companies thrive, not a few that haven’t started.
Those in the first category have used best-of-breed, composable software to develop a robust yet flexible technical framework for their e-commerce operations.
Just as importantly, they have offered compelling value propositions to their merchant ecosystems: clearly defined service level agreements and acceptable commission structures for all parties.
Getting those relationships right is much more important to B2B marketplace owners than their commercial counterparts, because the former tends to have fewer sellers. If you don’t keep them on board and by the side, your B2B marketplace will struggle to gain traction.
Harnessing the power of marketing
And you get that traction much faster if you make marketing part of the mix from the start. Make your online marketplace a destination in the minds of business buyers in your target market, and you’ll make it difficult for other vendors in your industry to match your efforts.
Smart operators will leverage the power of data to generate tailored campaigns and ensure seller support to ensure those campaigns hit the target and result in sales and growth.
Prepare your B2B business for success
The Covid crisis forced Australian companies to abandon traditional ways of doing business. Online marketplaces have emerged as an effective means of bringing B2B sellers and buyers together and enabling efficient, streamlined transactions. If increasing your sales and profitability is important to you in 2023 and beyond, putting your business at the center of a specialized e-commerce network can be a smart growth strategy.
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This post Why B2B marketplaces are becoming a smart place to be
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