Building resilience with B2B marketplaces

Florimond de Tinguy at VTEX explains how the B2B marketplace model can ensure your business’s resilience

 

Consumers have long embraced the marketplace model of online retail, most of them without even consciously choosing to do so. After all, why would consumers care that they are shopping on a centralised platform hosting multiple sellers - unless the cost and shipping times differ among sellers, of course. 

 

We see this in play with Amazon, Etsy, Alibaba, and most recently, Temu. The rewards for these marketplaces are clear: strong customer loyalty, high revenue, and a wider product variety - all while sidestepping the potential drawbacks of the inventory-based model of ecommerce, like dead stock and storage costs. 

 

As in so many other areas, trends in B2C reverberate in the B2B space, with more and more businesses entering the marketplace space as well. Digital Commerce 360 reports that B2B marketplace sales grew from $260B in 2023 to $351B in 2024, and more than half of business buyers report that their company allows purchases from the largest B2B marketplace: Amazon Business.

 

 

What is a B2B marketplace?

Marketplaces have been around since the beginning of commerce. A modern digital marketplace functions similarly to the markets of antiquity: it brings together multiple vendors selling diverse goods and services so that buyers can fulfil all their needs in one place.

 

A modern B2B marketplace is the same concept redesigned for business buyers. These marketplaces typically offer pricing structures and benefits tailored to business needs, such as volume discounts, financing options, and supply chain visibility.

 

Some of the most well-known B2B marketplaces were established by companies that previously mastered the B2C marketplace model, with Amazon, eBay, and Alibaba leading the charge. But given the broad array of niche needs in the B2B space, marketplaces catering to specific industries have sprung up in the gaps, offering everything from tools to toothbrushes. 

 

 

Benefits of a marketplace model

The advantages of a marketplace model extend beyond consumers to business buyers, making it an attractive option for companies looking to scale. One of the primary benefits is the ability to increase revenue through multiple streams. Businesses can generate income by charging a commission on purchases made through the marketplace, selling advertising space, offering subscription fees to sellers, providing lead generation programs, and monetising data. 

 

Additionally, by bringing supply and demand together in one ecosystem, businesses can leverage economies of scale to reduce shipping or payment processing costs. These savings can be passed along to suppliers to foster loyalty or treated as increased margin. By offering a broad selection of relevant goods, a marketplace can become a one-stop shop for customers.

 

The model also enables businesses to collect valuable data on customer behaviour and SKU performance, providing insights into demand trends and optimising offerings accordingly.

 

A marketplace also serves as a strategic defence against large tech platforms that may be capturing market share. By combining industry-specific knowledge with the convenience of a marketplace, businesses can maintain customer engagement and reinforce their brand presence.

 

Launching a new product traditionally requires significant investment and risk. A marketplace allows businesses to offer a broader selection without expanding warehousing or developing new supply chains. Additionally, working with multiple suppliers for the same product reduces dependency on any single source, increasing supply chain resilience and ensuring customer demand can always be met.

 

 

Adopting a marketplace model

Not every business can switch over to the marketplace model and have it work, and even the ones that are won’t be able to do so without some specific retooling. Doing so will change business operations fundamentally, and require making strategic decisions about supplier management, fee structures, and logistics.

 

Success requires a culture that embraces adaptability and collaboration, as well as the agility to navigate challenges that arise when managing multiple suppliers. Industry position and knowledge simply isn’t enough. 

 

But the solution can be tailored to a company’s goals and resources. Marketplaces can provide varying levels of support to sellers. Some offer comprehensive logistics solutions, handling warehousing, fulfilment, and customer service, while others operate as purely transactional platforms, leaving fulfilment entirely to sellers.

 

Each model has its trade-offs. Offering fulfilment services can simplify operations for sellers and create a better customer experience, but it requires investment and careful fee structuring. Leaving fulfilment to sellers reduces operational complexity but necessitates strong quality control and customer service processes.

 

To ensure a successful marketplace launch, businesses should have a mature eCommerce operation with integrated inventory and order management across all channels, a reliable supplier network, and multiple fulfilment options, all tuned to the needs of their customers’ sector-specific needs. 

 

 

Do you have the right technology in place?

Running a digital marketplace is a significant technological endeavour. A marketplace platform must be scalable, secure, and flexible enough to evolve as the business grows.

 

The technology should support seamless onboarding for sellers, efficient catalogue management, advanced search functionality, and robust analytics. Additionally, it must integrate with existing business systems, such as ERP and CRM platforms, to streamline operations.

 

For example, Colgate-Palmolive recently embarked on a similar streamlining of its B2B purchasing experience for dental and skincare professionals. A household name but with a niche B2B proposition, Colgate’s modern headless ecommerce platform simplifies ordering, enhances personalisation, and enables seamless subscription management.

 

Its marketplace platform supports multiple brands - including Colgate Professional for dental products and PCA Skin for aestheticians - with the more modular design enabling Colgate to scale efficiently. It’s the same customer centric commerce approach as a B2C platform, just with the scalability and professionalism of the B2B space. 

 

 

The future of B2B marketplaces

Adopting a marketplace model can unlock new growth opportunities for B2B businesses, offering an alternative to traditional expansion strategies. While the transition requires careful planning and investment, a well-executed marketplace strategy can drive revenue growth, increase resilience, and position businesses as leaders in their industries.

 

By fostering an adaptable culture, refining the business model, and investing in the right technology, businesses can successfully launch and scale their own B2B marketplaces—ultimately reshaping the way they serve their customers and compete in an evolving digital landscape.

 

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Florimond de Tinguy is VP of Growth at VTEX

 

Main image courtesy of iStockPhoto.com and da-kuk