What is a B2B Marketplace : A Complete Guide

B2B marketplace is fast growing in popularity all around the world. Online markets are booming, from Alibaba and Amazon to smaller start-ups that cater to certain industries – a trend accelerated by the Covid 19 outbreak.

If you’ve ever wondered how B2B Marketplaces work and how they can help you generate leads and revenue for your company, this is the place to be. We can assist you in answering these issues by providing insight into the B2B landscape.

What is a B2B marketplace?

A B2B marketplace is an eCommerce platform that connects B2B suppliers and buyers to conduct business in one location online. Businesses sell their goods (typically in bulk with B2B) as well as other value-added services in a B2B marketplace, but the sellers are brands, producers, suppliers, and distributors, and the consumers are other businesses, just like in a B2C marketplace. The marketplace operator handles these purchases via the internet.

A B2B marketplace is also known as a B2B trading platform, a B2B acquisition or sourcing website, a B2B portal, a multi-vendor marketplace, a B2B catalog and directory, and more, depending on the diverse nature of B2B selling.

Business models and types of B2B marketplace

B2B marketplaces come in a variety of shapes and sizes, depending on the participants’ structures and other variables.

1. Horizontal vs. vertical marketplaces

Vertical marketplaces (also known as “vortals” or “vertical portals”) focus on a single product category or industry. Horizontal marketplaces sell a variety of items and services, catering to the demands of customers from various segments or industries.

2. Many-to-many markets vs. one-to-many marketplaces

A single purchasing business manages a one-to-many marketplace. Large vehicle businesses, such as Nissan, can, for example, create an eCommerce marketplace where their vendors can gain access and submit bids and prices for the services they require.

You may be more familiar with many-to-many marketplaces, in which buyers and sellers are from separate companies and the marketplace is run by a third party. This includes sites like Alibaba.com and Amazon Business.

3. Marketing on a local and global scale

We distinguish global and regional B2B marketplaces based on their location. Companies offer exclusively to their local market on local marketplaces, but global marketplaces allow for the exchange of products and services without regard for geographic boundaries. This increases the risk and difficulty of running a profitable global marketplace since it must address extra concerns such as worldwide payment, cross-border business and logistics, communication and language limitations, and so on.

Whether you plan to start your own B2B marketplace or trade through large B2B platforms, the business strategies and revenue sources for such a firm are crucial to understanding. The three most frequent B2B marketplace business models are listed below:

4. Business model that is dependent on commission

A commission is paid to the marketplace administrators for each successful order a vendor receives through the site. Depending on the type of product, product category, order volume, cart value, and other trade characteristics, the marketplaces may impose varying cuts.

5. Subscription-based business model

To use the marketplace’s platform for business, sellers must pay a membership fee. This strategy is more prevalent in large B2B trade markets with a large number of repeat customers. To entice more people to join, the marketplace can include some added value in subscription packages. Special account management services, increased visibility into products in the catalogue, access to special categories, marketing features, logistics help, and other services could be included.                                                                                    

6. Listing fee business model

This approach is similar to pay-per-view, which is used in video streaming services. This model requires sellers to pay an additional listing charge when posting a product for sale on B2B retail marketplaces that adopt this model.

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