Joining the online marketplace movement can help your enterprise expand its presence in the commercial arena.
Are you looking to increase your sales and profits and grow your footprint in new market segments? For most business owners, it’s a rhetorical question but making it happen via conventional business development activities is very often a slow burn.
Investing in a larger inventory is capital intensive. Hiring additional personnel to woo and win new accounts will increase your overheads and operating costs well before you begin to turn the desired profit.
The rise of the marketplace
A growing number of consumer-focused businesses have circumvented these hurdles by implementing online marketplace technology that enables them to sell products and services that are owned and shipped by third-party sellers, a la Amazon and eBay.
Here in Australia, we’ve seen a string of household name players, including supermarket giant Woolworths and outdoor entertaining specialist Barbeques Galore, create their own destination sites. The next year, many others will follow suit.
Gartner highlighted the opportunity in late 2020, opining that enterprise marketplaces represented not only a new set of technologies for driving digital commerce but a fundamental business model change for commerce organisations.
It predicted organisations that had operated enterprise marketplaces for more than a year could expect to record an increase in digital revenue of at least 10 per cent.
B2B businesses have been slower to embrace the online marketplace trend but that’s likely to change as more enterprises become cognisant of the advantages that can accrue from putting themselves at the heart of an eco-system of sellers.
Embracing B2B eCommerce
While, historically, B2B selling was heavily focused on face-to-face interactions, the Covid pandemic has upended that paradigm for what appears to be good and all. The protracted lockdowns of 2020 and 2021 put paid to industry roadshows, trade fairs and in-person sales and ushered in an era of online demonstrations and electronic interactions.
Research suggests business customers haven’t been unhappy with the change. Only 20 per cent of buyers were looking forward to the return of the rep, according to 2020 research published by McKinsey. Almost three-quarters of US businesses surveyed stated digital selling was working for them, and there’s little reason to suppose their counterparts Down Under see things any differently.
Bottom line? Businesses are relaxed and comfortable about spending money online for everything from office supplies to high-priced plants and equipment. That means there’s a significant revenue opportunity for B2B businesses willing to invest in creating specialist destination hubs that digitally bring sellers and buyers together.
Driving sales and growth
If you don’t know too many businesses that have succeeded in getting a B2B marketplace up and running, don’t worry – you will. Sceptics on this score may find it instructive to take a look at what’s been happening in other countries.
Germany, for example, where Saitow, a company you’ve likely never heard of, runs Tyre24, an online marketplace where some 40,000 commercial customers go to buy tyres, wheels and automotive parts. It handles an impressive 100,000 transactions a day and clips the ticket on each and every one of them.
Steps to success: To get the wheels turning and emulate the Saitow online marketplace success story? At Spryker, we’ve seen a growing number of B2B businesses getting it right, not a few that have failed to launch.
Those in the former category have used best-of-breed, composable software to develop a robust yet agile technical framework for their e-commerce operations.
Just as importantly, they’ve offered compelling value propositions to their seller eco-systems: clearly defined service level agreements and acceptable commission structures to all parties.
Getting those relationships right matters far more so for B2B marketplace owners than their commercial counterparts because the former will typically deal with fewer sellers. Fail to keep them on board and on the side, and your B2B marketplace will struggle to gain traction.
Harnessing the power of marketing
And you’ll gain that traction much faster if you make marketing part of the mix from the outset. Establish your online marketplace as a go-to destination in the minds of the business buyers in your target market, and you’ll make it difficult for other suppliers in your sector to emulate your efforts.
Smart operators will draw on the power of data to generate tailored campaigns and secure seller support to ensure those campaigns hit the mark and result in sales and growth.
Setting your B2B business up for success
The Covid crisis forced Australian businesses to abandon traditional means of doing business. Online marketplaces have emerged as an effective vehicle for bringing B2B sellers and buyers together and facilitating efficient, streamlined transactions. If increasing your revenue and profitability is important to you in 2023 and beyond, putting your enterprise at the centre of a specialist e-commerce network may prove a smart growth strategy.