Now's the time to build your B2B marketplace

Now's the time to build your B2B marketplace

Team Balance
Team Balance
·
July 13, 2021


Apparently we’re not the only ones who’ve been consumed with online shopping during COVID. Businesses were getting into it, too. Leading to the most unexpected (earlier to arrive at the scene than expected) change of all - business to business marketplaces.

On second thought it is very likely the most natural evolution out of this pandemic - lots of business buyers converted from buying goods and services by paper, phone and other manual procedures into buying the majority of these online, for the first time.

This makes B2B marketplaces the fastest growing ecommerce channel - surpassing its B2C counterparts. The sheer volume of transactions alone makes it a huge elephant in the proverbial ecommerce room that no supplier, integration tool, designer, or even retailer can ignore - ultimately, it’s affecting all of us, in several different ways.

This hasn’t always been the case, though. B2B marketplaces have a long history of failed promise, mixed results and lackluster interest from buyers and sellers - until now.

B2B marketplaces first appeared on the ecommerce scene years ago (over 20 years ago, actually). While the concept of a universal platform where buyers and sellers can meet, view available products and services, and make purchases sounded good at first, multiple B2B marketplaces launched over time but ultimately failed. The major issues ranged from inadequate ecommerce technology that enabled buyers and sellers to complete complex transactions easily and quickly, and a lack of interest from big companies with a substantial market share.


In general, B2B marketplaces appeared destined to occupy only a minor niche in the u.s. So what changed?

In the last 2 years, a series of events literally transformed the future of B2B marketplaces. Boosted by such major ecommerce players as Amazon business and Alibaba, among others, plus the rapid launch of dozens of vertical industry marketplaces, online marketplaces are by now the fastest growing B2B ecommerce channel.

And it all makes sense, doesn’t it? at the end of the day, if there's 1 thing that any seller wants, no matter the industry, whether consumer of B2B, it is - distribution. And marketplaces allow manufacturers to explore different ways to sell to buyers and reach news ones in new ways they themselves couldn’t, beforehand. The individuals occupying decision making roles within those manufacturers are now millennials, wanting to diversify and expand their channels as much as possible, while competition is only getting harsher.


So buckle up, and let’s enjoy this new era! While you’re at it, consider these takeaways:

  1. 24 months ago, there were approx. 70 vertical B2B marketplaces. Today, the estimated number is 250. That’s 357% growth - in a category that would arguably be considered completely ignored by mainstream tech, supply chains, media and advertising.
  2. In terms of collections going through these platforms, we’re looking at 130% growth YoY in 2021, accounting for 3.5% of all business ecommerce sales.
  3. Amazon Business is moving quickly to become a more dominant company in B2B ecommerce, according to a new research brief from Bank of America Securities internet analyst Justin Post. He predicts that Amazon Business could generate $31 billion in gross merchandise volume this year, a figure that could accelerate to as high as $83 billion as soon as 2025.
  4. B2B marketplaces are diverse and not one size fits all. Much like their consumer counterparts, hundreds of new vertical industry marketplaces are now designed to bring together digital buyers and sellers in a specific industry.
  5. Here’s where it gets most interesting - covid changed many aspects of B2B ecommerce, to a point where 40% (!) of business buyers now purchase at least 50% of their organization’s goods and services on marketplaces.
  6. AND - they’re going public. ACV Auctions inc. raised more than $400M on the NASDAQ last quarter, and more are about to follow suit.

Business marketplaces are not only here to stay - they’re growing in a massive, mind blowing pace. They’re industry specific, with major manufacturers or distributors playing a prominent role in the rapid expansion in the U.S and worldwide. They’re uniquely built and fitting their category’s specific needs - yet they’re all experiencing the lack of integration and automation tools and infrastructure that can help them create a better, healthier experience and business.



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