Global B2B eCommerce sales are projected to reach $6.7 Trillion by 2020, according to Forbes. The future trend will be corporations setting up their own B2B eCommerce platform.
B2B (Business to Business) eCommerce is selling products or services between two or more businesses online. A B2B company is primarily a business relationship between a manufacturer and a wholesaler, or a wholesaler and a retailer; a supply chain which involves more than two companies.
According to a Frost & Sullivan’s report, the key force driving the growth of B2B eCommerce is the marketplace model – which brings together large numbers of buyers and vendors onto one platform. An online B2B marketplace acts as a center of the business community where various businesses and companies such as seller and buyer companies including suppliers, importers, exporters, retailers, wholesalers, etc. are able to connect with each other for selling and buying the various products at one digital platform.
Marketplace Model: The Big Shift for B2B companies
Big players like Amazon and eBay have completely changed the fundamental way of how B2B eCommerce operates. And it’s now the time to invest in and optimize the way, the buyers purchase directly from their websites, offering more and more services around the sale. Large B2B retailers today convince their customers to source supplies through online channels, instead of, the traditional channels like phone, fax, branches, catalog, or sales forces on the ground.
A study conducted by Forrester found that marketplaces — when efficiently operated — are likely to boost customer loyalty, boost average order values, and build trust.
Here are the main reasons B2B companies should extend their eCommerce efforts with their own multi-vendor Marketplace:
1. Shifting Buyer Habits
B2B buyers now conduct research and purchasing online, changing the dynamics of how B2B commerce works. Nearly 50% of companies with an Internet storefront estimated that more than half their client portfolio would fully or partly migrate to the Web channel over the next three years.
Today, 80% of B2B buyers expect the same level of convenience as received on B2C sites that tend to offer a broad array of products, convenience, and fair prices – if consumers do not find what they are looking for on one site, they quickly switch to another.
The key aspects of acquiring and retaining professional customers are the same as the benefits offered by a Marketplace:
All without incurring overhead like inventory and human resource costs that cut into profitability and slow time to market.
2. Increased Customer Expectations
With the increasing changes in B2B buying behavior, wholesalers must optimize the online shopping experience by following best practices of B2C. Amazon is the perfect reference model for all B2B players investing in the eCommerce channel, so much so that companies aspire to recreate the “Amazon experience” on their own websites. Doing so requires increasing the breadth of products offered while keeping Quality of Service high. These are two essential levers (the other being price) of an effective strategy for acquiring and retaining professional customers. The Online Marketplace model is the only one that addresses all three levers. Amazon changed the game in B2C retail and is having a fast impact in B2B, with Amazon Business doing over $1 Billion in its first year of operation.
3. Quick Way to Build Customer Value and Trust
The best way to create customer value is to gain and maintain the trust of that customer. When a customer decides whether to buy any product from one company or any competitor company, then he will compare the price and quality of the product and on the basis of that his trust will increase. This will help customer and sellers both to make the decision, and his trust will remain. There are very few companies in the market that can be trusted by the customers. Therefore, whenever a customer finds a company that can be trusted by him, he finally realizes that this company is worth his investment and ensures to maintain the business relationship.
4. Risk-free Products Assortment Expansion
Every business wants to have more and more customer as possible. Online Marketplaces have their advantages in this area as they already have an established customer base. The online Multi-vendor marketplaces will have many vendors and product varieties. So, as many vendors will get connected to it, more customers will get attracted to that marketplace. With the Multi-vendor Marketplace model, vendors with even small businesses can also come into an audience of buyers that were previously inaccessible. Buyers also win, gaining access to an extensive range of supplier catalogs and products, with a customer experience that rivals B2C standards.
5. Impressive Growth Forecast
In addition to this $7 Trillion global forecast by Frost & Sullivan, Forrester Research estimates that B2B eCommerce will exceed $1 Trillion by 2020 in the US market alone. B2B eCommerce will grow strongest in manufactured goods, such as spare parts in the automotive and aerospace industries, professional and consumer electronics, industrial machinery, and office supplies and equipment. This represents a huge market opportunity.
Conclusion
With the multi-vendor marketplace model, vendors – even small businesses – can tap into an audience of buyers that was previously inaccessible. Buyers also win, gaining access to an extremely wide range of supplier catalogs and products, with a customer experience that rivals B2C standards.
Leave a Reply
