Episode 6 of B2B Commerce UnCut was all about B2B marketplaces. Jary Carter led the discussion, with Yoav Kutner, CEO of Oro, Inc., and Rodrigo Garcia, VP, Chief Technology, Transformation Officer, PartsBase, Inc., joining in. Over the hour-long talk, the group explored the all-important questions like why marketplaces are gaining traction in the B2B sphere, how marketplaces work in B2B, how to prepare for a marketplace project, and what cautions to consider in doing so.
Rodrigo, who has consulted numerous Fortune 100 companies like GE and Coca-Cola, kicked off the discussion on his tenure at PartsBase, Inc., the world’s first and largest fully online parts locator service. He spoke of the benefits of the marketplace model and the technology evolution that made this model possible.
If you want to learn more about marketplaces, then this talk is for you. We cover where businesses and technology are going, the needs of the market, the participation challenges, and the most prominent use cases. Toward the end, we cover the challenges and benefits of building marketplaces.
Why is the marketplace model gaining traction?
The B2B marketplace model is gaining traction because of its inherent flexibility, believes Yoav. Due to market consolidation and the demand for efficiency, businesses want more control of their relationships – including offloading some responsibility to their vendors. This is particularly true for franchises, procurement firms, brands looking to expand to B2B2B or B2B2C selling. Many businesses also want to offer value- added services around their products.
Where is this evolution pushing the marketplace model?
In general, most B2B industries are pretty competitive. Many B2B businesses want to introduce a marketplace model as a way to boost efficiency and streamline back-end operations. “Some companies want the customer to feel like they’re buying from a single brand, but in actuality purchase from multiple companies”, notes Yoav.
Many industries could benefit from greater transparency, too. If a marketplace can offer sellers the right experience and the potential for long-term success, they will look for selling platforms that facilitate that.
What are the must-do things for B2Bs launching a marketplace?
In the B2C arena, you can relatively easily define who your ideal customer is. But in the B2B space, it’s a little bit more tricky, says Rodrigo. The B2B space has buyer personas that are diverse, from their primary industry needs to purchase preferences to how they engage with you and other members of the ecosystem.
If you’re a manufacturer and distributor, you’ve got a lot on your plate – from business models to vendor management to customer support and more. Then there’s the marketing side of things and managing and driving engagement.
What are the biggest challenges in building a marketplace?
“By far the biggest challenge seems to be adoption,” says Rodrigo. When I say adoption from a technology sense – it means attracting sellers, suppliers, and end customers. So there should be a smooth onboarding process for vendors that may need to adhere to different regulations or bring their own requirements to the table. Marketplaces have many moving parts, and accommodating suppliers, sellers, and their customers is definitely a challenge.
“Standardization and data enrichment are definitely challenges,” says Yoav. “It’s something that, when combined with integrating with different systems and offering a unified customer experience, presents a stumbling block for businesses trying to implement marketplaces.”
Quotes and Takeaways
“Ask yourself – what is the advantage you bring to your industry and customers?” stresses Yoav. Then, choose a solution that works for you. “With a mature company like PartsBase, it was easy – because when they came to us, they knew what they wanted, and we built a solution for them. Not having a clear understanding of what you want to do, or going all in too fast, can throw you off track.”
You can listen to the entire uncut podcast and read a transcript here.
If you enjoyed this episode, share it with your friends on social media. Don’t forget to also share what you think by heading to our podcast landing page to ask a question, suggest a topic, or leave feedback.