25.09.21
What Is B2B Marketplace?
This type of marketplace implies cooperation between business representatives. It can be both wholesale and small deliveries but in the long term. The same goes for services. For example, the relationship between a ballpoint pen manufacturer, a distribution company, and an accounting organization can be called B2B.
All 3 participants in the procurement process are representatives of the business, but prices differ for them. The supplier earns on the difference between wholesale and small wholesale prices, the manufacturer earns on the number of goods sold, and the customer, represented by the accounting company, receives the product at reduced prices.
All 3 participants in the procurement process are representatives of the business, but prices differ for them. The supplier earns on the difference between wholesale and small wholesale prices, the manufacturer earns on the number of goods sold, and the customer, represented by the accounting company, receives the product at reduced prices.
Why are B2B marketplaces needed?
First of all, for conducting wholesale trade and providing services. In the case of trade, it is millions of dollars because large transactions are often concluded to supply office equipment, building materials, fertilizers, or overalls for both enterprises and retail chains that sell all this in retail. This model is popular among technology and agricultural giants who need to maintain a leading position in the market. It also applies to a commodity business, but B2B marketplaces operate in a different area as well.
Services on B2B marketplaces are presented in a different format than on the same B2C, C2C, and P2P platforms. Here we are talking about IT companies that develop personalized software for business, as well as outsourcing companies that provide accounting, legal, security, or consulting services to third-party companies. Yes, they often offer their experience and skills in the retail market, but due to the high price and narrow specialization, they are more in demand in B2B.
So, B2B can be called a profiled model of relationships between companies. In this case, special platforms help to structure all offers and weed out “small players” because the entry threshold is very high, and it may be “too tough” for small companies. The quality and quantity of goods and services here fully justifies the above-average prices because companies lose their reputation in case of non-compliance with standards, sinking to the very bottom of the market hierarchy.
Services on B2B marketplaces are presented in a different format than on the same B2C, C2C, and P2P platforms. Here we are talking about IT companies that develop personalized software for business, as well as outsourcing companies that provide accounting, legal, security, or consulting services to third-party companies. Yes, they often offer their experience and skills in the retail market, but due to the high price and narrow specialization, they are more in demand in B2B.
So, B2B can be called a profiled model of relationships between companies. In this case, special platforms help to structure all offers and weed out “small players” because the entry threshold is very high, and it may be “too tough” for small companies. The quality and quantity of goods and services here fully justifies the above-average prices because companies lose their reputation in case of non-compliance with standards, sinking to the very bottom of the market hierarchy.
Pros and cons of the B2B model
Advantages of B2B platforms:
Effective communication between the parties, usually provided between groups of suppliers and consumers with the participation of intermediaries (platform representatives)
A wide range of items from various categories that are most in-demand in the business segment.
Lower prices influenced by the batch size, logistic conventions, and the number of intermediaries.
Impressive transaction amounts, often more than a million dollars.
The quality of goods and services is at the highest level because it affects the reputation of the business of suppliers and sellers.
Specialization of each participant, focus on professionalism and decent quality.
Disadvantages of B2B platforms:
High entry threshold, so there are practically no small and medium-sized businesses on such platforms.
Tough competition: since the leading players give up their positions rarely, you need to make every effort to increase competitiveness.
Narrow specialization and limited target audience that leads to a serious struggle for each client. Services and goods must be of appropriate quality to attract new and retain old partners.
The risk of failure, because it is quite challenging to succeed in climbing the market hierarchy in a highly competitive environment.
Relations between business representatives in B2B marketplace
Wholesale purchases are not limited by the capabilities of B2B sites. A fairly young branch is B2B-B2C engagement. In a way, it is analogous to dropshipping, but in a slightly different context. The retailer publishes a product on the B2C platform, which, after purchasing by the user, is sent by the supplier/manufacturer directly, i.e., the seller receives the difference between wholesale and retail prices, and the supplier takes care of logistics and order processing. This model of work is quickly developing, keeping small businesses afloat.
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Marketplace is an online service, no special steps to install software on the user's side are required.
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