Making ecommerce predictions can be a thankless task in such a fast-paced sector. But in the world of B2B ecommerce, I’m confident that a significant driver of growth in 2022 will be online marketplaces.
Marketplaces aren’t a new technology, of course. Amazon first launched its marketplace back in 2000, and they are now an established part of the strategy for many B2C businesses. They are gradually starting to gain a foothold in B2B too.
Online B2B sales grew massively during the pandemic and are not slowing down as we (hopefully) emerge from the global health crisis. B2B companies are looking to marketplaces to supercharge their way of doing business, create wider ecosystems and tap into new ways of generating revenue in 2022 and beyond.
The evolution of ecommerce
In B2C ecommerce 1.0, businesses owned the entire inventory, stored it in their warehouse and sold it to customers. ecommerce 2.0 was a more mixed model. Amazon, for example, sells approximately half its inventory direct to customers while making 50% of revenue from commissions taken from vendors selling on the marketplace.
Ecommerce 3.0 is different again. Companies like etsy.com or Alibaba do not own any merchandise and just provide a platform for others to sell on. The inventory risk is removed while the marketplace owners take a percentage commission from the sale.
Now, higher value, long tail items are seeing increasing online demand. Previously niche markets are seeing tremendous growth, creating opportunities to build marketplaces that tap into a critical mass of interest for vertical markets.
The B2B opportunity
This emergence of long tail items online and the growth of niche markets are important developments for any B2B business. Gartner has predicted that by 2023 at least 70% of enterprise marketplaces launched will serve B2B transactions, and it feels like there is now a real window of opportunity for B2B companies to utilize marketplaces.
Each country cannot support too many multi-category B2C marketplaces like Amazon. But there is scope for a much larger number of specialist B2B marketplaces. B2B buying behaviour is very different from B2C. In B2B, there is no single dominant vendor, there’s no Amazon. There is room for hundreds of smaller Amazons, serving each vertical and niche market.
In B2B, a marketplace is not just an opportunity to sell more products. The key is to offer associated services and subscriptions. Compared with B2C marketplaces, B2B marketplaces can offer a more sophisticated approach to providing product data, addressing security issues or offering insurance. The offer might include integrated services because when businesses buy thousands of printers, for example, they want to buy the service, not just the product, from installation to the ongoing ink supply.
Making the shift to a B2B marketplace model
That’s not to say a shift to marketplaces is straightforward for B2B companies. Selling services or products that you don’t own introduces many variables that most ERP systems cannot handle. B2B marketplace systems need to check availability, update pricing, and factor in currency exchange rates.
Furthermore, most B2B sectors have a few thousand users for a specific product and sometimes only a dozen or so vendors of that product. If a B2B marketplace is set up well with a win-win proposition for both vendors and sellers, the opportunity is huge.
Making that shift is involved but will include elements such as:
Addressing cultural changes – many B2B businesses are highly sales-driven and may struggle to get their sales teams to accept that there might be components in a deal that they don’t control. Or there might be a sale made over the marketplace, where the sales team did not have a call with the customer, so they don’t earn a commission.
It’s essential to address this shift with the right teams, as a successful marketplace project can benefit the entire business as a whole.
Delivering some quick wins at the outset – those required cultural adjustments make it all the more important to get some quick wins. Any project needs to justify its place in the world, and B2B marketplaces are no different. You want results in weeks, not months, and once you have made quick wins, break down the roadmap into milestones that you can control. If you spend two years creating a marketplace, too much will change.
Getting the balance right – a marketplace needs enough participants in its market to make it thrive, and the offer and demand side must be balanced. This means there are not too many merchants selling, demand is growing but not being fulfilled, or the customer is not seeing a wide enough selection of products.
Therefore, any B2B marketplace should begin with a set of vendors and sellers willing to cooperate with the owner to build a marketplace framework. You need to create a compelling technical proposition to keep this cohort on board and then expand as fast as possible.
Essentially, B2B marketplace success is a question of marrying technology and vision to address the significant opportunity in B2B that has emerged in 2022. The potential of B2B marketplaces is vast and makes sense for all parties. For individual suppliers, a few orders each day does not justify setting up their own ecommerce channel. But a marketplace can drive hundreds of orders a day with associated services and subscriptions.
Offering this increased product choice is a sure-fire way of growing the business for the marketplace owner. B2B marketplaces will be huge in 2022 – if you’re in B2B and not looking at marketplaces for ecommerce growth, you need to think again.