UPD 05.01.22

B2C Marketplace: Specifics of building B2C Platform

Statistics show that the annual turnover of the leading online trading platforms reached $2.67 trillion in 2020. It means excellent prospects for expanding your business and creating your own store on any online trading platform. According to the report from Grand View Research, the market share of B2C marketplaces in the United States in the e-commerce field will increase in the next few years by an average of 9.7% annually. Thus, its volume is projected to reach $7.65 trillion by 2028. But what do business owners need to know before launching startups? Scallium experts will tell you everything about this.

What Is B2C Marketplace?

It is a marketing model in which sellers and their customers interact with each other. A B2C marketplace platform provides a wide range of tools for creating, editing, and promoting content. Such a centralized cloud platform has everything you need to start trading successfully. Therefore, it is very popular with both business representatives and consumers.

It is like a large virtual supermarket where retailers offer customers various products or services. Platform owners must keep a balance in such systems to promote effectively. That is, to create affordable cooperation offers for both sellers and consumers to satisfy their purchasing interests.

In an increasingly competitive market, B2C marketplaces strive to develop flexible and attractive collaboration options. Usually, administrations specify conditions and commissions. For example, a percentage can be deducted from the sale of each specific product or when the amount of sales reaches a limit. In return, managers provide space on websites and servers, round-the-clock technical support, and favorable conditions for cooperation with logistics service providers. Also, it is necessary to ensure the safety of transactions through the platform. Founders must take care to minimize the risk of facing an unscrupulous retailer.

Whom are these platforms targeted at?

First of all, B2C marketplace platforms focus on representatives of small and medium-sized businesses that provide services or commodity items to consumers. These include manufacturers of casual goods such as cosmetics, electronics, apparel, footwear, and accessories. Among the service providers are ateliers, dry cleaners, or hairdressers. In other words, all consumer services.
Startups and retailers showcase their products on B2C marketplace platforms to get the following benefits:
Expand their businesses. Cooperation with online platforms helps to cover a large part of the market and distribute products within the country and even abroad.
Build sales quickly. 3-5 days pass from registration on the marketplace to the first transactions if you work with a well-promoted and successfully functioning website. But it is profitable to promote your products on "young" marketplaces too. You will be responsible for placing ads and paying commission, and the service will do the rest. Thanks to the algorithms and search tools, buyers can find and order its products themselves.
Avoid delivery problems. B2C marketplaces often use fulfillment services to collect and store goods in warehouses and independently pack and deliver orders to customers. In this case, sellers save money on courier delivery and the rental of warehouse premises.
Any business focused on a specific consumer is B2C. Most marketplaces follow this model. The benefit for consumers is an extensive range of products of all categories, often with an optimal price/quality ratio. Benefits for businesses are healthy competition, prospects for creative brand development, and a good attitude towards each customer. In general, a B2C marketplace is a source of valuable goods and services at relatively low prices.

Pros and Cons of B2C marketplace

Despite a large number of entrepreneurs with a similar range of products, B2C marketplaces have a lot of advantages, making them profitable for e-commerce businesses.

Pros of B2C:

Healthy competition between brands. On a marketplace, you can find dozens of vendors with a similar range of products. The platform administration receives feedback from consumers about sellers. Both the website and the merchant are interested only in positive ratings. It stimulates healthy competition in the market and affects the quality of services and goods provided.
Possibility of creative development in pursuit of the target audience. The huge selection of similar products on the B2C marketplace forces both large companies and small stores to develop new ways to attract potential buyers. Exciting and extraordinary ideas appear, such as new designs, presentation methods, and others. Such activity forces stores to develop and expand horizons to retain the target audience.
Good prospects for scaling. To expand your business and find clients abroad, you need significant funds that are often inaccessible to small businesses. Therefore, B2C marketplaces come to the rescue, where it is enough to place your items to find foreign consumers. For retailers, it is much more profitable and faster.
Complete client database. Such platforms are visited by people of different interests, ages, tastes, etc. Therefore, there is a good chance that the assortment of a particular store will be noticed by users who would never have visited its own website. Also, sellers turn to online platforms to save time and money on collecting information about potential customers and building up their customer bases.
Low standardized fees. To attract customers and get profits, B2C marketplaces charge percentages. The amount is set for each price category individually and may depend on the number of products placed on the website.
Partnership with logistics companies. Streamlined transportation and storage of products save time on delivery of orders to customers. It allows virtual supermarket owners to expand their capabilities and attract more retail stores. Also, this advantage allows for adding new categories to the B2C marketplace, including large equipment and goods with extraordinary storage conditions.
Extensive product base. This advantage follows from the previous one and is complemented by the placement of products and services of different areas. Simply put, large marketplaces offer various products, which attracts buyers and sellers.
Partial insurance against unscrupulous retailers. Ideally, transactions made through an online platform must guarantee security for both parties, the seller and the consumer. Unfortunately, marketplace admins do not always manage to track dishonest users. Nevertheless, B2C marketplace software helps to minimize risky operations and ensure security.

Cons of B2C:

Increased final price of the product. The manufacturer-consumer chain, which includes a supplier, managers, and couriers, negatively affects the final cost of a product or service. With a "direct" purchase, customers can get what they want at a lower price. But we note that in the conditions of active development of e-commerce, most buyers prefer to overpay but receive a guarantee for the safety of the purchase and delivery.
High competition in the market. It is primarily due to the low threshold for brands to enter B2C marketplaces. The second factor provoking competition is the presence of the same types of stores with the same types of products. To highlight their product online, sellers need to buy VIP statuses or first places in the TOP lists. It depends on the kind of monetization that the founder implements.
Complicated attracting target audience to your products. Again, the large number of competitors makes it more difficult for retailers to convince consumers to purchase in their stores.
Low consumer confidence in new market players. In the physical world, this is not a big deal. The opening of a new store, accompanied by promotions and "welcome" discounts, will be much more successful than the same on the Internet. An unknown retailer who posts affordable deals on the B2C marketplace is likely to create distrust in a potential buyer. This problem may be overcome by introducing "safe transactions".
Huge competition in popular niches monopolized by large local stores.

Success strategy in B2C e-commerce

The main success factors for starting a business on the B2C marketplace include:

knowledge of the fundamental principles of doing business in the e-commerce field;
understanding and developing a unique offer;
calculation of expenses for logistics services;
Launch a store on the site and at the same time start a marketing campaign to attract a target audience.
Adhering to the principles of satisfaction and retention of the target audience;
research and monitoring of competitors' activities;
understanding the need to strengthen customer confidence.
Due to immense competition, a successful online store launch can be an overwhelming burden. But only if you start work without preparation. Before entering the B2C market, you need to study existing marketplaces carefully. They are valuable sources of information to analyze. So where to start your own business?

Steps required for a successful start of sales on the B2C marketplace platform:

Determine target audience and trending products/services. It is not enough to display products in an online store, you need to make sure that it is in demand. To do this, conduct a market survey, outline trend directions, and distinguish the most popular product categories.
Analyze competitors. Do it in the context of both marketing and assortment. To develop your advertising campaign, follow the innovations of leading companies. It may also lead to original ideas for presenting your products.
Create a unique offer or distinctive feature of our brand. This step will ensure the recognition of the future company and increase customer loyalty. Since the competition is high, you need to stand out to become successful.
Launch your store on a B2C online marketplace. When starting to sell on the platform, conduct a marketing campaign to attract a target audience. When potential customers are interested in the assortment, provide them with options for purchasing products. It will help you reduce the risk of losing consumers who need the product "right here and now".
Analyze your work. Compare results with competitors and draw conclusions. Based on them, repeat the steps until you get the desired effect or continue promoting your products and update product shelves on the B2C marketplace.
We have told you about the basic points that online retail store owners should know to start selling on the B2C marketplace platform. The action plan described above will help you launch your own store, increase sales, and expand your target audience.

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