In my previous articles, I discussed the conveniences that e-commerce and Marketplaces bring to people's and buyers' daily routines. Now, I have decided to delve a little deeper into the topic, discussing concepts, conveniences, and key considerations so you can understand the importance of B2B Marketplaces.
Discover some important concepts below:
What is E-commerce?
It stands for electronic commerce, with its main characteristic being a proprietary online store or website where companies sell their products.
What is a Marketplace?
It is a platform designed to connect sellers to their consumers, bringing together several suppliers that make their products available to a broader range of clients through a single platform. On the other hand, clients have access to a wide variety of items from different brands, being able to purchase them in a single online purchase.
What is a Buying Club?
It is a business model based on recurring revenue. Through a platform, the consumer becomes part of an exclusive group of members entitled to a series of benefits and discounts.
When we evaluate the application of B2B Marketplace platforms, we encounter companies with catalog functions in their ERPs (Enterprise Resource Planning systems), procurement rules and policies, compliance requirements, among others.
So why do I believe this technology is a trend for corporate implementation? Below, I list some positive aspects and key considerations to keep in mind:
Usability:
Marketplace tools generally feature a more modern interface with photos, shopping cart features, and other conveniences, allowing users to select the products they wish to purchase in a practical and assertive manner.
Procurement Costs:
As this solution aims for economies of scale by applying buying club concepts and demand centralization, pre-negotiations conducted by platform curation companies seek more attractive prices below suppliers' standard rate cards.
Sales Growth:
On the other side of the table, suppliers have the opportunity to reach a significantly larger number of clients by joining a single Marketplace platform. This reduces sales operational costs and increases company revenue.
Dependency:
One point that may conflict with procurement policies is the issue of competition. Many companies have a baseline rule requiring a minimum of 3 bids for purchases and contracts. Marketplace platforms generally do not prioritize this requirement, often offering only one supplier option for a specific group of products.
Brand Loyalty:
The use of Marketplaces can influence brand loyalty, given that platforms offer various brands and even multiple distributors for the same brands; ultimately, the prominent brand for the user will be the platform and not necessarily the supplier.
Integration with Management Systems:
This point can be an area of caution, but also an opportunity. Implementing a B2B Marketplace must be done carefully, considering all company rules, processes, and policies without increasing the operational workload of the teams involved. Therefore, integration with management systems, known as ERPs, is essential to deliver a competitive advantage and automate the process.
Marketplaces become a shortcut for both buying companies and suppliers, as access is standardized and reaches a larger volume of users.
This is yet another technology that adds value to procurement processes, bringing benefits to the Supply Chain department—which can focus on strategic activities—and to its internal stakeholders, who gain greater ease in acquiring products, especially tail-spend items (Class C).
Read more on our blog
