The appeal of the B2B marketplace and the growth opportunities created by it have started to grab the attention of manufacturers long before the COVID-19 pandemic began. Many companies were already playing with the idea of “getting one” before the outbreak.
Now, with the pandemic accelerating digitization and the move to eCommerce, B2B suppliers are no longer wondering why they should open a new eCommerce channel — but how. Luckily, online marketplaces are not as risky as other, more traditional sales ventures. A new channel can be very quick and easy to set up with a trade portal.
Tapping into new revenue streams
Although moving to an online marketplace is an extremely low-risk solution for driving new revenue streams and maintaining an active business presence in a now fragile landscape, many manufacturers lack the strategies and resources to do it. But the appeal is strong enough to make manufacturers leap into this uncharted territory. After all, with an online marketplace, companies have more revenue potential by:
- Onboarding sellers in a matter of hours;
- Leveraging trustworthy third-party seller expertise;
- Capturing the long tail efficiently with zero capital investment;
- Acquiring new customers with free site traffic;
- Leveraging free R&D for product sourcing.
According to Gartner, “by 2023, organizations that have operated enterprise marketplaces for more than one year will see at least a 10% increase in net digital revenue.” And this prediction was made before the outbreak and the accelerated digitization that followed.
Considering the state of the world at the moment, it’s perhaps even more important to acknowledge the opportunities online marketplaces can provide simply by gathering a huge number of global buyers and sellers in one place and making their B2B trade operations seamless with the necessary tools they need to communicate, contract, finance, coordinate shipping, manage logistics, and more.
Driven by digital demand
Alibaba.com has surveyed more than 5,000 U.S. small and mid-sized businesses and discovered that 42% of respondents have increased their eCommerce transactions between March and September of this year compared with the same period in 2019. This is undoubtedly the effect of the accelerated digitization enforced by the pandemic. So, with everyone moving online, it’s only natural that B2B manufacturers follow suit if they haven’t already.
On top of that, B2B buyers have grown tired of the friction they encounter along the buyer’s journey — from ordering to fulfillment — and prefer the same convenient purchasing experience that B2C websites generally offer. And this is because the personalization and speed of purchasing on sites like Amazon and Alibaba, which are also expanding into the B2B market, is proven to be much more effective and captivating than the traditional B2B purchasing route that generally involves finding a catalog, distributor links, searching for contact details, interacting with a channel partner, etc.
Another big part of this expected purchasing experience is transparency and access to information.
At the moment, millennials are the largest generation to occupy the business space and, according to a SnapApp and Heinz Marketing report, nearly 60% of them have stated that “they only engage sales in the middle of a purchase decision, actively avoiding sales until only after they’ve had a chance to do some research on their own.”
To make a purchasing decision, millennials access information via review websites, web inquiries, demos, social media, and peers. According to BigCommerce, “these [millennial B2B] buying behaviors mimic B2C buying behaviors in which brands must educate, build trust, and build community before a purchasing decision is made — or even considered.”
However, despite the lengths millennials like to go to for research purposes, they don’t enjoy overlong purchasing processes. They, too, want to make fast purchasing decisions and manufacturers can accommodate this need by having a reserved spot in the online marketplace where their millennial B2B buyers can access the information they need.
Are you considering the possibility?
Manufacturers should strive to meet their clients where they are — and right now, clients are increasingly online. As such, it’s important to develop sustainable B2B marketplace strategies that can ensure business continuity in the new normal.
Luckily, efforts to put manufacturers on the right track are underway. In the United States, Alibaba.com — the global B2B eCommerce marketplace of Alibaba Group — developed a program to help small and mid-sized US manufacturers accelerate their digital selling and marketing strategies. The Digitization Sprint program is free to use for qualified manufacturers and it provides them with the necessary resources for launching or expanding new B2B sales channels.
Although other quick-start solutions exist to help you launch a B2B marketplace, you should keep in mind a few key recommendations that will help you build a strong presence:
- Ensure your buyers have an exquisite digital buying experience. Titans like Amazon and Alibaba have already set the tone, so it’s important that you also make the buying experience seamless, cost-effective, fast, and secure.
- Educate and support your buyers with meaningful content. Use different types of content formats, such as case studies, demos, or eBooks, to show how your products work and how your consumers can benefit from them.
- Track the right numbers. According to Nick Christensen, AppSumo’s Head of User Acquisition, you need to know how much it cost you to acquire a new customer and what is their real worth to you.
Use these recommendations and other available research and support programs to migrate to B2B eCommerce effectively. It may seem reckless, but it’s a low-risk venture and there’s a lot to look forward to.
And, if you think about it, one of the most interesting aspects of B2B marketplaces is that they make B2B purchasing more natural, organic, and human. Isn’t that an appropriate twist considering the pandemic has caused humans to isolate and businesses to move to an almost exclusively digital environment?