A version of this article has been published in Global Trade Magazine, contributed by Yoav Kutner, CEO and Co-Founder of Oro Inc.
Enterprise marketplaces are transforming the way businesses buy and sell online. They create exciting new opportunities for operators, from manufacturers and retailers to franchisors and government actors.
Below, we’ll define an enterprise marketplace and explore its ten essential benefits for businesses looking to develop their digital commerce presence.
What is an Enterprise Marketplace?
You’ve probably heard of or used online marketplaces such as Amazon and eBay that connect buyers and sellers. An enterprise marketplace is a similar business model, but it’s owned by an organization that wants to sell its products to customers and establishes a marketplace to offer additional products, augment its partner networks, or improve customer experience.
Here are the ten key benefits enterprise marketplaces have to offer.
1. Create new revenue streams
Selling through an enterprise marketplace channel unlocks new revenue streams. One real-life example of this benefit comes from Frankfurt Airport. The company launched an online marketplace for airport customers and now receives membership fees by listing products and promotional offers from its retailers.
2. Offer better customer service
Selling online through a marketplace creates an opportunity to expand from B2B into B2B2C or D2C models while still offering engaging experiences. For example, Andikem, a provider of chemical fulfillment services, uses its marketplace to optimize fulfillment and provide a more transparent supply chain.
3. Address unmet customer needs
An enterprise marketplace can help you solve pain points along the customer journey. One of the largest online equipment rental marketplaces, DOZR, implemented a marketplace to address unmet demand from construction contractors. Through its WebStores marketplace, the company has streamlined renting of heavy equipment by connecting thousands of suppliers with hundreds of thousands of customers.
4. Simplify complex procurement
An enterprise marketplace can facilitate complex procurement scenarios. Used by large enterprises and governments, they can involve third-party vendors, regulators, and bidding and procurement tools. Since a marketplace is a centralized platform, it also helps organizations coordinate across multiple divisions, subsidiaries, or business units, without disrupting strict ordering workflows.
5. Streamline purchasing
B2B organizations typically deal with multiple suppliers and need to meet their negotiated prices and order approval processes. An enterprise marketplace can help streamline negotiations by enabling self-service on the front end and executing complex B2B pricing strategies on the back end. As a result, operators can not only improve efficiency but also lower costs for all parties involved.
6. Enhance franchise relationships
Strong franchisor-franchisee relationships are essential to the success of both parties. An enterprise marketplace model can help improve visibility into these relationships while facilitating greater collaboration between the head office, franchisees, and suppliers. It also ensures the desired experience for customers.
7. Expand product offerings
Companies also add a marketplace to their core business to expand their product offering through their networks. One example of this is Walmart Marketplace, which offers its marketplace vendors and end-users an opportunity to sell through its network of 5,000 brick-and-mortar stores.
8. Maximize the use of existing assets
A marketplace allows organizations with an extensive distribution footprint to use their assets to maximum advantage, for example, by connecting marketplaces with fulfillment centers. This way, companies can improve supply chain visibility and accelerate order fulfillment.
9. Elevate online product presentation
Aside from growing their product catalogs with the help of vendors, an enterprise marketplace enables companies to provide detailed, quality product information. Having detailed product data translates into a strong value proposition for vendors and customers.
10. Create a stronger ecosystem
Enterprise marketplaces with large partner networks facilitate and encourage collaboration. For example, Toyota Material Handling built a more robust partner ecosystem by bringing together over 200 certified dealers on its marketplace platform. This helped Toyota build a more dynamic partner network and grow relationships with its partners.
To Unlock These Benefits, Start Thinking Strategically Today
To enjoy the benefits of an enterprise marketplace, it’s crucial to plan your marketplace investment with a measured, strategic approach.
Your strategy for building an enterprise marketplace should begin with developing the operational infrastructure, from clarifying purchasing processes to establishing fulfillment workflows and payment systems. It’s also critical to ensure you have support from all company stakeholders.
Importantly, you need to be ready to invest considerable resources to build a thriving marketplace. The amounts required can be crushingly expensive for brands that aren’t mature or ambitious enough.
Finally, research your B2B marketplace software options by matching your needs to the platforms’ features and capabilities. A guiding principle here is to select a solution that can support the specific needs of B2B and enterprise operators without compromising on marketplace functionality.