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How to Build a Successful B2B Marketplace

The ultimate guide to building and participating in B2B marketplaces: opportunities, challenges and strategies

As the world of online commerce continues to evolve, B2B marketplaces are becoming an increasingly important part of the landscape. Businesses that are not already selling their products through B2B marketplaces should consider doing so in order to stay ahead of the competition.

However, marketplaces need to start out as a strategy and roadmap discussion to ensure that value pools are both understood and achievable.

This article will break down the opportunities and challenges associated with building and participating in B2B marketplaces—from evaluating resources, choosing a business model, marketplace implementation and transitioning from creation to operations.

What are B2B marketplaces?

B2B marketplaces are online platforms where businesses can buy and sell products from other businesses.

Marketplaces are the fastest-growing commerce model, and customers’ preferred purchasing method, even in the B2B space.

There are three roles in the B2B marketplace: operators, sellers and buyers. Depending on the marketplace model, different stakeholders will play different roles.

Operators orchestrate the ecosystem and connect buyers to sellers, and are also responsible for demand generation, facilitating transactions, as well as controlling and managing the data.

Sellers provide the goods and are responsible for fulfillment, which they can also delegate to the operator or a third party. They usually pay a commission or fee to the operators to sell their products.

Buyers, i.e., the business customers, use the marketplace to research multiple options considering different prices and brands.

A successful B2B marketplace requires more than just creating an online store. Businesses must first outline their business case, operating model and competitive risks.

Once this strategy is in place, they must answer several key questions:

Which players in the ecosystem should be part of the marketplace?
What are the customer journeys for these players?
How will data be shared and governed?
How can the marketplace minimize friction among competitors?

Choosing a B2B marketplace business model

There are two main B2B marketplace business models: selling products on another operator’s marketplace (third-party marketplace) and operating your own marketplace (first-party marketplace).

Depending on your business’s resources and ability to drive demand, each business model offers unique benefits and risks.

The benefits of participating in a third-party B2B marketplace

There are many benefits to participating in a B2B marketplace, even if you have overlapping products with other sellers. For example:

Provide access to a sizable up-front audience with minimal effort
Can be easier and cheaper than launching a localized direct site
Marketing and sales costs are handled by the marketplace
The marketplace owner is responsible for infrastructure or transactions

Of course, there are also some risks associated with participating in a marketplace:

Losing control of your brand, or undermining competitive positioning
Turning your products into a commodity
Unfavorable commissions, fees, margins
Losing control of your customer data

However, the benefits of participating in a marketplace can outweigh the risks, especially if you have a well-defined strategy and a strong team in place.

How to mitigate the risks of participating in a third-party B2B marketplace

There are also a number of things you can do to mitigate the risks of participating in a marketplace, such as:

Choose a marketplace that is well-established and has a strong reputation
Conduct research on the other sellers who will be participating in the marketplace
Develop a clear pricing strategy that takes into account the competition
Invest in marketing and advertising to drive traffic to your website or store

One of the most important strategies to mitigate risks in third-party B2B marketplaces is through partnerships and relationships with other sellers. The first step is sharing data and insights with competitors in a way that protects your own business advantage.

The benefits of building a B2B marketplace

While participating in a third-party marketplace requires less up-front investment, there are many benefits to building a first-party B2B marketplace.

The benefits:

Control of customer experience and data to use for test-and-learn automation
Avoidance of channel conflict with retailers/distributors
Ease of integration with loyalty programs
Commission and expanded product catalog from third-party partners

There are also a fair number of risks that come along with building and running a first-party marketplace.

The risks:

Significant development efforts and increased liability
Requires additional ongoing investment to operate, market and maintain
Must drive traffic to build a base of buyers and recruit sellers
Vendor and customer loyalty can be difficult to achieve as the B2B landscape becomes more competitive

How to build a B2B marketplace

Step 1: Identify the needs of your customers

In today's digital age, businesses want self-service options for purchasing just like consumers. Even in a B2B marketplace, where products and services are more complex, businesses want the same level of self-service options that B2C customers have. There are various options for B2B companies, including providing the services and products themselves or partnering with other companies to provide them. Acquiring companies that already provide these services is also an option.

However, the process starts with identifying the needs of customers and finding ways to provide the products and services that meet those needs. In general, there are two critical needs that B2B customers have when it comes to marketplaces. The first is trust in the brand and the company's ability to deliver. In mission-critical jobs, such as delivering fresh groceries across the country, reliability and trust are essential. The second need is a seamless and intuitive user experience. The right technologies must enable business leaders to interact and get the key qualities they need, exactly when they need them.

Step 2: Identify marketplace partners to fulfill customer needs

The process of creating the marketplace begins with identifying the different types of products or services that customers require based on market research. The company then has to identify the competencies and capabilities required to deliver these services.

Once the competencies are identified, the operator company needs to search for partners that can fulfill these needs, including both internal and external manufacturers and service providers that can enter as sellers on the marketplace. The goal is to create a pool of sellers who could offer a wide range of products or services to customers.

It’s important to then set up governance and define ways of working, analyze the current distributors and suppliers and agree on contracts.

Step 3: Create the marketplace infrastructure

Next, the operator needs to create the digital infrastructure for the marketplace, identifying current pilot technology vendor retailers. This may include building a website and app that would allow customers to access the marketplace and directly purchase products or book services. The operator also needs to create a system for managing the providers and their products and services, as well as a payment system for customers to transact.

Marketplace architectural components enable the marketplace ecosystem, but they must be carefully tuned. It’s important to create a marketplace prototype with customer journeys to test with real customers and iterate based on initial data gathered to optimize the experience ahead of scaling. The operator also needs to determine the KPIs or B2B marketplace metrics before delivering the first launch of the pilot. Change management should also be carefully considered in planning phases to identify areas where the capability will need support and where new processes will be needed—or existing ones augmented—to orchestrate cohesion under the new business model. Expect that team structures will evolve over time as the marketplace lifecycle matures.

Step 4: Launch the marketplace

The launch of the marketplace is critical as the operator has to ensure that the marketplace is marketed effectively to customers, both existing and potential, to generate interest and drive traffic to the site. The company also has to onboard the service providers and ensure that they understand how the marketplace works and how to use it effectively.

It’s best to execute high-value and complex requirements first in agile sprints to deliver a phase one pilot for specific customers or regions before rolling out an optimized pilot to all markets.

Step 5: Monitor marketplace performance

Finally, the company has to monitor the marketplace's performance and make adjustments as necessary. This involves collecting and analyzing data on customer usage, seller performance and marketplace revenue. By tracking these metrics, the operator can identify areas for improvement and make changes to increase the marketplace's effectiveness and profitability.

As the B2B marketplace space evolves, the industry player that attracts the most critical mass will establish itself as a leader, not only in transactions but also as a collector of customer data and insights that can lead to new offerings.

Companies should be prepared for their team structures to evolve over time as the marketplace transitions from launch to expansion to maintenance and long-term growth.

The B2B marketplace solution

Unlike other platform partners, Publicis Sapient helps B2B consumer products firms build marketplaces from strategy to implementation. We stitch together commerce, order management systems and marketplace platforms to create industry-leading solutions that scale.

Publicis Sapient's expertise in B2B marketplace development

Publicis Sapient has a global center of excellence in building and managing B2B marketplaces and have helped businesses of all sizes create and scale marketplaces in the consumer products industry.

Our team of experts has the experience to help you: