Cloud Topics

B2B Marketplaces: A Guide for Your Business

By Ideas @ AppDirect / July 6, 2021

In the world of B2B product and subscription commerce delivery, the winds of change are blowing.

A recent report projected that B2B marketplace sales would grow from $680 billion in 2018 to $3.6 trillion by 2024, surpassing B2C marketplaces, which were predicted to grow to $3.5 trillion.

The study also indicated that B2B marketplace shopping experienced a boost during the onset of the COVID-19 pandemic as sellers quickly added relevant third-party offerings to their marketplaces while buyers shifted their operations - and their purchasing behavior - to digital channels.

These trends have broad implications for businesses in a variety of industries. For communications service providers (CSPs), in particular, the growing popularity of B2B marketplaces coincides with the expansion of Internet of Things (IoT) bundles, offering these providers a chance to streamline their offerings.

How can your business benefit from a marketplace platform for B2B products and services? First off, let’s start with the basics.

What is a B2B marketplace?

A B2B marketplace is an online marketplace where business customers can purchase bundled product offerings, standalone items, or subscription packages from a variety of different vendors at one centralized, integrated location. The marketplace may be offered by an independent third party or by a principal vendor, which can offer its own products and services alongside those of partners and other third-party companies.

Some solutions used for B2B marketplaces, like AppMarket, can be white-labeled so that the buyer encounters branding from the principal vendor throughout the shopping experience.

Product offerings will vary according to a company’s business model. The customer may complete a one-time transaction or purchase subscription services. B2B marketplaces may sell physical products, software as a service (SaaS) and support, professional services, or a combination thereof. For CSPs in the IoT space, the ability to bundle all three together in a subscription commerce model is a key benefit of using a centralized marketplace platform.

Top features of a B2B marketplace platform

B2B marketplaces represent an untapped opportunity for many businesses because they can accelerate commerce transformation. As companies seek new ways to enhance the customer experience and drive recurring revenue, digital marketplaces that help facilitate the complex requirements of B2B subscription commerce are rising to the forefront.

What are some B2B marketplaces?

B2B marketplaces include global giants like Salesforce.com as well as restricted-access procurement portals and a wide variety of other systems. While some marketplaces offer a narrower product portfolio with an emphasis on access to a wide variety of competing brands, others focus on granting the customer access to a suite of complementary services and solutions. For businesses that want to launch a new online marketplace for their customers, finding the right platform is often the first step they take into this growing field.

What features should a B2B marketplace have?

To help ensure that your B2B marketplace supports the needs of your business while providing an experience that’s optimized for the buyer, there are some key features this solution should have. Look for essential items in these areas:

• Important features for launching your marketplace: Ideally, you’ll be able to customize your marketplace to align with your branding, whether that’s accomplished through a drag-and-drop interface or custom coding. You’ll also want to use a platform that’s capable of selling the specific product types you offer while providing a quick and seamless checkout process, rich product profiles, customizable merchandising options, and a robust catalog of relevant, integrated third-party supplier products and services.
• Essential elements for managing the online B2B marketplace: Look for a platform that empowers your business to provision applications immediately or to commence the fulfillment process automatically once a customer completes a transaction. Automating these functions improves the customer experience and eliminates work behind the scenes. Managing the complexities of various billing models should be no problem for your platform. Additional features to look for include customer management tools, add-on partner solutions, sophisticated reporting options, and real-time data visibility.
• Crucial items for supporting third-party developers: Your online marketplace can offer more value by promoting new products and services created by third-party developers. Solutions from your company and pre-existing offerings from partners and other vendors can be augmented by new solutions. A comprehensive set of developer tools and integrations, as well as a streamlined approval process, can help pave the way for a valuable and dynamic ecosystem.
• Attributes that will elevate the customer experience on your B2B platform: Ultimately, customer satisfaction is the goal. Your platform should offer single sign-on access across all associated applications. Customers also benefit from platforms with centralized user administration where they can manage access, monitor usage, and more. Personalized notifications and customer segmentation can help you drive engagement and promote products from within the marketplace.

Creating the B2B marketplace that’s right for you

Launching a B2B marketplace doesn’t have to be a complex or costly undertaking. Selecting the right platform for your needs is the first step in the process, but getting this initial effort right means you’re well on your way. While you’ll need to adopt the view that your marketplace is an evolving entity, an out-of-the-box platform with extensive customization options will give you the engine you need to roll out your offering and the flexibility necessary to keep it running.

What to do before selecting a B2B marketplace platform

Before you decide on your marketplace platform, we’ve identified several questions you should ask yourself about your business:

1. Will the platform integrate with legacy technology?
   Make sure that your new marketplace can integrate smoothly with existing technology before you get started on an implementation.
   
   
2. Does the platform offer billing that is purpose-built for digital marketplaces?
   Today, B2B subscription commerce is crucial for generating sustainable revenue, but it introduces new complexities. Your billing engine will have to be up to the task while also supporting complicated usage-based pricing and bundles that incorporate a variety of first- and third-party products and solutions.
   
   
3. Does the provider offer a catalog of leading applications?
   If your platform provider offers popular third-party applications from day one, your B2B marketplace will enjoy a head start. Look for built-in integrations with valuable products from outside vendors.
   
   
4. Does the provider make it easy to onboard new applications?
   As the marketplace operator, it falls on you to help promote ecosystem growth by making it easy for developers to integrate, test, and maintain new product ideas. Make sure your platform can support these efforts.
   
   
5. Does the provider have an innovative product road map?
   Given the expected growth in B2B marketplaces over the next several years, your offering will have to keep pace with rapidly rising customer expectations. Select a platform vendor that’s invested in continuous innovation.
   
   
6. Does the provider have deep experience and expertise in digital commerce?
   Ideally, your platform provider should have extensive experience supporting digital commerce initiatives for respected enterprises. The platform’s creators should also be focused on understanding the unique needs of your industry and your particular company.

Which B2B marketplace model is right for your business?

Ultimately, your business has specific requirements that your B2B marketplace model must be able to handle. Key factors include your existing technology, your product offerings, and the industry in which you operate.

Manufacturing

For today’s high-tech manufacturers, the physical devices they sell need to offer enhanced functionality through the deployment of IoT interactivity and integrated applications. B2B marketplaces that integrate with digital supply chains are crucial for customer satisfaction.

CSPs

Many CSPs already offer sophisticated, comprehensive product catalogs consisting of connectivity, devices, SaaS, professional support, and more. A centralized platform for providing a streamlined customer experience and unified, automated back-end processes make these complicated offerings work well for communications companies.

Procurement

Businesses that need to improve their procurement processes may turn to B2B marketplaces to help them improve employee access. Online marketplaces help bring procurement up to date by providing a one-stop shop for acquiring hardware, software, and other IT needs.

How to succeed with a B2B marketplace

Measuring success for B2B marketplaces depends largely on what your business hopes to accomplish. Every company has unique goals for its marketplace. Developing a plan for achieving these outcomes will depend largely on your industry and where your product offerings stand currently.

However, there are a few specific marketplace objectives that should help most organizations thrive in the B2B market:

Get to market fast

The prevailing trends show us that B2B marketplaces are the future for many industries. In some sectors, they’re already the norm. The benefits of releasing your marketplace ahead of your competitors are immense. This strategy will help you gain customer traction, allowing you to earn loyalty and grow your user base as you expand your offerings.

Drive revenue through subscription commerce

Use your marketplace to help support the transition to a B2B subscription commerce model for your business. This technology can help you replace one-time transactions with opportunities to add value for your customers while achieving more sustainable, recurring revenue.

Improve efficiency for your operations

Managing bundles that incorporate your own offerings alongside products and services from outside suppliers is a complicated endeavor, especially when usage-based pricing is part of the equation. Use a centralized platform to help you automate reporting, billing, reconciliation, and revenue sharing - instead of relying on manual processes that require you to use a variety of separate systems.

Continue striving for innovation

In a constantly evolving technological landscape, the key to success is to never stop improving your offerings.

Get started on your marketplace today

If you’re ready to find a B2B marketplace platform that can meet your needs, reach out to the AppDirect team to schedule a meeting today.