What is a B2B marketplace?

May 25th 2023 ecommerce

It’s no secret that B2B (business-to-business) transactions have largely migrated online. According to Gartner, by 2025, 80% of these business sales will be processed through digital channels. 

But that’s just the start of a B2B ecommerce platform “uprising” of sorts; the virtual business ground is continuing to shift. How? An increasing number of B2B retailers are choosing to launch their own global B2B marketplaces. By 2023, Gartner expected that 15% of medium to enterprise-size businesses would be operating one of these. 

What is a B2B ecommerce marketplace? 

In a traditional B2B sales business model, sales representatives, procurement officers, operations managers, and customer service representatives are all involved in making sales. The specific duties may vary with the size and structure of the B2B company, but generally, people play an outsized role in the workings of the B2B ecommerce market.

In the B2B ecommerce marketplace model, much of that transactional hand-holding is proving to be no longer needed, as the online ecosystem facilitates easy interaction and sidesteps the need for the traditional human intermediaries.

How is a B2B marketplace different from a B2C marketplace? 

“B2C marketplace” is not exactly a widely used term, but B2C (business-to-consumer) marketplaces are a very familiar concept to most people, as B2C ecommerce storefronts are happily visited by millions of people worldwide.

Amazon is probably the best known B2C ecommerce platform, plus there are so many others, including eBay and Etsy. 

A B2C marketplace differs from a B2B marketplace in several ways: 

• B2C marketplaces host transactions between businesses and end-user consumers
• B2B marketplaces host transactions between businesses 
• B2B marketplaces tend to involve B2B buyers placing large-volume, high-value orders. The purchasing process can incorporate complex negotiations; it caters to establishing long-term contracts, and it facilitates the completion of recurring orders
• B2C marketplaces involve one-time (or sometimes, repeat) retail purchases with standardized pricing; negotiation is uncommon 
• B2C marketplaces offer consumer goods
• B2B marketplaces center on business-specific products and services, including raw materials, components, machinery, and professional services

Thriving B2B marketplace examples include Alibaba, Amazon Business, ThomasNet, Shopify, eWorldTrade, and Global Sources.

How does a B2B marketplace work? 

Imagine a traditional multi-vendor marketplace such as a trade fair or expo. Everyone from entrepreneurs’ startups to small businesses to large enterprises sets up their stalls with marketing messaging and promotional signage. It’s an opportunity for connecting with potential buyers and turning them into new customers, and also — business reps hope — setting up long-term recurring sales. 

A B2B online marketplace is a bit like that. Businesses can promote their products and services to their customer base, while their potential customers can browse the B2B product listings, connect with sellers, and negotiate deals. The difference is that what happens in this sales channel all happens online. Business buyers can search for items and browse sellers’ listings, filtering their search results based on criteria such as price and location.

What do B2B marketplace transactions look like? 

B2B industry marketplace transactions vary with the platform, product, and service. Here are a few things business shoppers can do: 

• Request a quote (RFQ): Before making a purchase in a B2B online marketplace, a shopper can request a quote. Users submit requirements matching their business needs and can negotiate the price before finalizing the ecommerce sale.  
• Negotiate a contract: Contracts related to the supply chain and other issues are a big part of the mix for B2B customers, and it’s no different with an online marketplace. Buyers can negotiate terms, such as pricing, quantity, and delivery date. When the parties agree, the platform can generate a contract for them to review and digitally sign.  
• Get an invoice: B2B marketplaces can facilitate the invoicing process, generating invoices during a transaction and emailing them to the buyer. Some B2B marketplace ecommerce sites provide tools for managing invoices and payments, too.
• Make a purchase: Like a B2C online marketplace, a B2B marketplace also offers the ability for a business shopper to buy instantly. Customers can select products and services in listings, make purchases, and receive confirmation when their transactions are complete. 

Benefits of setting up a B2B marketplace

Like trade fairs, B2B marketplaces can offer your company and other sellers: 

• More visibility: B2B marketplaces go hand in hand with the creation of databases of buyers who are looking for business products and services
• Quick access to key information: An advanced search tool can let B2B shoppers quickly zero in on the right products and services, creating a rewarding customer experience
• Increased efficiency and cost savings: B2B marketplace workflows are built to streamline transactions. Parts of the sales process, including order processing and invoicing, can be automated and digitized, which eliminates the operating costs of manual (e.g., paper-based) processes, thereby saving time and money while preserving a working customer relationship
• Easy product and price comparison: With tons of item listings in one digital location, B2B marketplaces contain a wealth of product information for buyers to read and compare, all of which can be readily produced with a quick search

Challenges of setting up a B2B marketplace

A B2B marketplace with poorly organized or displayed content will leave business people frustrated. Plus, if it’s not well indexed or accessible by efficient search functionality, business buyers may understandably go elsewhere. 

Here are the things to avoid with your B2B marketplace platform: 

• Poor quality control: A reputable B2B marketplace is one that hosts suppliers of high-quality products and services. Associating your business with — or launching — a less polished marketplace can result in a negative user experience and damage your reputation.  
• Less-than-stellar security: Data is a commodity, which means companies running online platforms need to fortify B2B transactions. Ecommerce website transactions requiring the provision of sensitive business information are at risk of fraud, data breaches, and cyberattacks, so ensuring that your B2B marketplace has robust security measures is crucial. 
• Shoppers not finding what they need. Your marketplace platform could be beautiful, but without decent search functionality, it’s likely to struggle. Being able to connect buyers with the right items (or the right sellers) can make all the difference in conversion and revenue.
• Loss of the human touch: Compared with traditional human-conducted B2B selling, B2B marketplaces (and individual B2B websites) are obviously lacking in personal connection. You can combat this to some degree by personalizing the user experience in your marketplace as a B2C marketplace would. Putting in place personalization and intelligent recommendations, for instance, can give business buyers a sense of connection so they want to establish a working relationship.

Optimizing your B2B marketplace 

Are you looking to launch a B2B business marketplace? The Algolia API can provide the search experience you and other B2B sellers need to do well in the B2B market, with: 

• A fast SaaS search solution that’s proven to get results
• High relevance and processing speed for search results 
• Indexing that updates in almost real time as new products are added and removed
• Helpful insights and analytics to assist you and other ecommerce business owners
• Easy integration with the systems in your marketplace business digital platform

Turn your B2B marketplace into a bustling, trusted phenomenon with a reputation for expertly meeting your business customers’ needs, attracting new business, and making more online sales in your industry. Contact us today.