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Which B2B Marketplace Model is Right for Your Business?

February 26, 2021

Category: B2B Marketplace

Modern B2B businesses require eCommerce technology that’s able to meet the needs and complexities associated with traditional B2B workflows and customer preferences. As the B2B landscape continues to evolve, B2B businesses are constantly looking for new ways to compete. 

That’s why more B2B businesses are turning to Marketplace focused business models, either as an extension of their current eCommerce strategy or as a means to break into a new market. B2B marketplaces give businesses the opportunity to expand their go-to market efforts, extend their product catalogs, and gain margin. The B2B Marketplace model has transformed away from a “one size fits all” approach to a viable business model for many different types of B2B businesses. 

As the popularity of B2B marketplaces continues to grow, the key for any business is to choose the right B2B marketplace model for their goals. 

Which B2B Marketplace Model is Right for Your Business? 

Private B2B Marketplace

The private B2B marketplace is considered the most common marketplace model for B2B businesses. In this model, buyers and suppliers are digitally connected via a private marketplace owned or sponsored by a B2B business. This is a true marketplace, similar to an Amazon or an Etsy, but it’s closed, meaning only approved buyers and suppliers have access to it. 

The advantages of this type of marketplace model apply to all three roles – buyers, suppliers, and sponsors. By capturing  aggregate demand, sponsors can negotiate better pricing for everything from shipping to product supply to create margins. Additionally, the marketplace creates operational efficiencies and utilizes resources more systematically. For suppliers, on the other hand, private marketplaces provide digital self-service and the opportunity to standardize how they bring products to market. Finally,  buyers gain access to the products and services they need to run their businesses all in one place. 

Direct to Consumer Marketplace

One of the newer ways that B2B enterprises are using B2B marketplace models is through direct to consumer marketplaces. This marketplace model is growing in popularity for more consumer-facing, branded manufacturers. Business-facing manufacturers face the same challenge and opportunity. Selling direct to business buyers is becoming increasingly common as manufacturers take a more customer-centric look at their sales channels.

With a direct to consumer marketplace, manufacturers are able to solve two main challenges; channel conflict, and protecting the brand. Enterprises are able to extend their product catalog directly to consumers, potentially streamlining the supply chain and increasing revenue. 

Partner Marketplace

A partner marketplace model utilizes channel partners to allow B2B businesses to sell online by connecting buyers with certified dealers and distributors. In this type of marketplace, the B2B business owns the marketplace and manages the product catalog and admin of the site. Channel partners are then given access to the marketplace to sell the products to the ultimate end user. 

The main benefits of this type of B2B marketplace business model is the reduction in channel conflict, greater oversight in product data and inventory, and increased access to customer data. For the marketplace sponsor, there is a greater oversight in the entire supply chain, from the manufacturing of the product to the final sale, which translates into greater control. 

The marketplace business model is growing in popularity for many reasons. It allows B2B enterprises to gain margins, expand to new markets, and get control over their brand and products. Once you decide that the B2B marketplace model is right for your business, the next step is choosing the right platform. Look for platforms built with modern architectures that can support your business today, and grow with your business tomorrow. 

Download the B2B Marketplace Introduction eBook for a deep dive into B2B marketplaces. 

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