Business-to-business buying, and selling is being disrupted the same way consumer models have fundamentally changed over the past decade due to digital transformation. New mobile apps, rich-media product experiences, and even kiosks are energizing direct-to-consumer models and causing waves up and down the value chain — yet perhaps the biggest disruptor is the rise of B2B marketplaces as the new center of commerce.
But today, there are more full-featured platforms and better seller tools — and more options for standing up your own marketplace.
On the buy side, we are also seeing growing demand, fueled by:
- More full-services buyer tools. These are tools for research through contracts and purchase. Want to see where the market is going? Early signs of what’s possible are in the software-as-a-service (SaaS) space, where vendors such as Alibaba, Amazon Web Services, and Salesforce are setting the pace both in terms of inventory and adoption.
- Shifting buyer behavior. Digital maturity has been on the rise. And already many line-of-business and “speed-first” buyers prefer to buy online. Add in price and convenience, and marketplace adoption is contributing to the overall shift to eCommerce across all categories of B2B selling.
- Many more options across categories. There are options from vendors to retailers, distributors, industry associations, etc. We predicted that hundreds of new B2B marketplaces will be launched in the next year — and thousands in the next decade. Buyers have never had so many choices.
Sellers Need To Rethink Their Channel Marketing Approaches
More options for buyers mean more options for sellers. Should you: 1) double down on your own e-store; 2) look at how to launch your own marketplace; 3) work with your partners to see how they can support your digital selling; or 4) test out vertical marketplaces or even Amazon Business? Of course, the answer for many sellers is “all of the above.”
But while you are digesting the complexity of testing and managing all your channels, it’s clear you may also have to learn new tricks if you want to master marketplace selling. In short, you need to think like a consumer-packaged goods (CPG) brand.
How so? If you are going “direct” through a marketplace, it’s about building your brand, market education, and product differentiation vs. just the demand funnel and supporting distributors or handing off leads to dealers. It’s also about transparent, market-driven pricing — and embracing a subscription mindset. Customer success is paramount, as maximizing customer lifetime value (CLV) becomes the “new way” vs. aligning around just getting and delivering the next order.
And What Products To Sell (And Promote And Support) Online
As we explored in our recent report on marketplace selling, how you get started depends on where you sell today, what types of products you sell, who you are selling to, and the frequency and size of the purchase. You also need to consider the value of existing relationships and effort needed to change behavior internally (e.g., in your sales team) and externally (e.g., among your key accounts).
Even if you are just testing out this option, be ready for reaching new audiences and compressed buying cycles and also more options per category and price pressure (less good), new merchant rules to master, and supporting systems for pushing and pulling product and sales data.
But you don’t have a choice if your customers are already there or if your competitors are a step ahead. So how do you catch up? And if you are already testing out new channels, how do you move faster? We recommend starting by seeing which products or services are already a good fit. For example, when there’s a stock-keeping unit (SKU), you can provision it online or download it, and it’s an item that is often reordered — then, for suitable items:
- Evaluate current third-party options. That might start with Amazon if you want to sell consumables or a top SaaS marketplace if you have an app. We also see many more vertical marketplaces for reaching sectors such as life sciences (e.g., LabX) or aviation parts (e.g., ePlane) buyers. Third-party logistics play a big role if you’re going to make the switch from shipping pallets to existing customers to shipping individual SKUs to new customers.
- Get your product information ready. Owning the digital shelf depends on having product content that is compelling (multimedia?), searchable, and ready for syndication. Do you have the tools to create and update it? Do you know the lingo used by the crowds across each vertical marketplace?
- Get your team ready. Your channel manager and/or eCommerce team will be on the front lines of selling on marketplaces. We have identified five types of marketing skills that manufacturers and distributors will need: product marketing, content marketing and SEO, partner marketing (including packaging/APIs for certain regions or platforms), pricing strategy, and
This post was written by Vice President, Research Director Allen Bonde, and originally appeared here.