A version of this article has been published in Digital Commerce 360, contributed by Yoav Kutner, CEO and Co-Founder of Oro Inc.
Launching a marketplace is a great way to gain a competitive advantage in the B2B market. Now more than ever, there’s a demand for B2B marketplaces that serve specific needs and industry niches.
These marketplaces – which you might know as procurement websites, purchasing platforms, multi-vendor marketplaces, or even supply catalogs – are all designed to enable B2B customers and sellers to transact on a single website.
But how do you know that it’s the right time to invest in a similar platform for your business? Today’s article gives you three key signs to consider.
1. You want to reinforce your business ecosystem
Is your company community well engaged but interactions fragmented? It’s is a clear sign that it could benefit from a single platform, where your community can connect and trade.
Approach your existing customers and enquire who would benefit from a marketplace. Find out which of your suppliers and partners in adjacent segments may want to get in on the action. In the long run, a B2B marketplace can help you strengthen your existing relationships with customers and nurture new connections.
2. You want to position yourself as a leader in your industry
Running a marketplace can elevate your B2B company as a key player in your industry.
Investing in a marketplace indicates a willingness to take risks to move the business forward. While it can be daunting, a measured, strategic approach can earn respect from your industry peers and existing and future customers.
Plus, when you invite other sellers to complement your company’s own B2B offerings, you create additional value for customers. Doing so fosters lasting customer relationships and draws positive feedback and recommendations.
3. You want to diversify your revenue streams
Operating a marketplace can be a great way to boost your bottom line. With a marketplace, you not only sell to a broader pool of customers but also generate revenue from other sellers’ businesses on your website.
For example, many operators charge listing fees or sales commissions. While the amount involved might be negligible for a single seller, the aggregated sum can significantly contribute to an operator’s bottom line.
What are the next steps?
Identifying the need is the first step towards transforming your business into a thriving marketplace. At this point, it’s essential to figure out whether there’s an actual demand for a new B2B marketplace.
This process involves asking your biggest customers whether you (or your competitors) meet their digital buying needs, whether they already use marketplaces for procurement, or if they are considering this selling channel.
Once you answer these questions and confirm the need, the next step is to create a minimum viable product (MVP). It will help you figure out what bare-bones functionality you need while also making sure you create a user-friendly and reliable marketplace site.
Finally, with the MVP ready, you need to test the marketplace within your organization to see the value it delivers. After that, you should deploy it to a select group of buyers and sellers. Once you tweak the design based on their feedback, roll out the marketplace to a broader audience.
Time to take the plunge
While giants like Amazon and Alibaba occupy a big chunk of the marketplace market, there’s still room for newcomers. Don’t be discouraged by risks; instead, look forward to opportunities: by launching a marketplace, your brand will elevate its profile and boost its bottom line while securing your position in a digitally-led future.
Discover what you can learn from the success of the Alibaba marketplace model.