Gartner’s Future of Sales research indicates that by 2025, 80% of all B2B transactions will occur on digital channels. They also predict that by 2023 70% of transactions on enterprise marketplaces will be B2B. The B2B marketplace is the next step in the evolution of selling online.
Whether you are a manufacturer looking for exposure to new markets, an SPVM professional looking to simplify your procurement processes, or a wholesaler looking to increase your vertical your next digital channel may be a marketplace.
If that’s the case, you must understand why repurposed B2C marketplace software isn’t going to do the job for you. It doesn’t provide the features and functionality crucial for B2B marketplace success.
There are also certain services and software which can be used for procuring B2B marketplace for online business.
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Purchase Order Acceptance and Approval
When’s the last time someone tried to submit a purchase order to Etsy? Or more accurately, when’s the last someone successfully tried to submit a purchase order to Etsy?
In the B2C world, no one buys through a purchase order. In the B2B world, it’s how business is done. That’s why B2B software accepts EDI, punchout catalogs, and CSV file uploads for orders. B2C software doesn’t even try.
B2B marketplace solutions must provide for the acceptance of purchase orders in addition to the traditional shopping cart method of placing an order.
Automated Purchase Order Approval Workflows
Another advantage B2B marketplaces have over B2C marketplaces is the ability to automate the purchase order approval process.
Many times, a purchasing agent has a purchase limit. Anything above the limit goes to a manager for approval. B2B platforms allow users to define access and permission levels and can even allow users to define workflows. Accounting services for businesses can be used to organize workflow.
So, that purchasing agent won’t be able to check out with a purchase order above their limit. Instead, they submit for approval and the order goes directly to the manager for approval. The workflow can even include push notifications to the agent and manager if a specified number of days (say a week) has expired without the order being approved or denied.
Unique Pricing and Tiered Discounts
In B2C retail models, every customer pays the same price for an item. A customer may have a coupon code for a one-time discount, or the seller may run a promotion, but as a rule: the price is the price.
Not so with B2B transactions. Often prices are negotiated on a per-customer basis. It’s common for each customer to pay a slightly different amount. B2C marketplace software isn’t designed to handle complex pricing structures.
On the other hand, for B2B solutions, complex pricing schemes are just another day in the marketplace. Some B2B marketplace platforms even offer pricing engines for dynamic pricing on the fly.
Other solutions call on the ERP to access negotiated prices. Or, you may have a structured tiered pricing structure that either resides in the ERP or needs a home on the eCommerce marketplace.
No matter what approach you take, make sure your marketplace solution allows for granular pricing at the customer level as well as standard and tiered pricing.
The greater variety of vendors on your marketplace, the greater variety of pricing structures you’ll need to digitize.
Automated Negotiation Workflows
As a marketplace operator, buyers and sellers look to you to streamline the purchasing process. Purchasing agents and sales reps don’t want to do business through in-person sales calls, phone calls, and email exchanges. Both sides want to work more efficiently, that’s the appeal of the marketplace.
Since B2C transactions don’t negotiate on price and terms, B2C marketplace solutions don’t automate negotiation workflows. B2B marketplaces solutions do.
Digital RFQ Workflows
B2B marketplace software provides a digital request for quote (RFQ) workflow and can even automate the quotation process with the help of a robust pricing engine. This reduces the chances of error in pricing a contract and frees the sales.
Digital QTC Workflows
And when it comes time to close the deal, the quote to cash process is digitized as well. You may even find that digitizing these negotiations decreases the sales cycle and increases profit. But you don’t be able to do this with B2C software. It just won’t do.
Common B2B Payment Terms
The closest B2C marketplace software may come to offering terms is PayPal Credit. That’s not how a business does business.
Rarely is a payment made at the time of purchase. Terms for payment in 30 days, 60 days, or 90 days are common. As are small discounts for early payment.
This isn’t the way B2C retail is handled and B2C marketplace platforms can’t handle payment on terms.
B2B marketplace solutions integrate with third-party solutions to check for creditworthiness or allow individual sellers to do their own credit checks.
B2B solutions provide for payment the way payment is made in business.
That means almost half of transactions will be paid for by check with another 34% paid through the ACH. Less than 10% of business payments are paid with a credit card, making the credit card gateway less important than in B2C marketplaces.
Try explaining this to the person hawking repurposed B2C marketplace software and see how they propose to handle those payments. Just another reason B2C software just won’t do.
B2B eCommerce is complex. The software solution you use for your marketplace needs to embrace this complexity. B2C solutions aren’t up to the task.
The tech stack for B2B may be much larger than for a B2C solution. And when you have a large tech stack it’s easy for things to go wrong.
But if you go with an open-source B2B eCommerce marketplace solution you’ll access more than an open code source. Take advantage of an open API to integrate all business systems. Your vendors will appreciate the ease of using their PIM to populate their product data without hours upon hours of painstaking data entry.
If you want the ultimate in marketplace design, use a B2B marketplace solution that easily enables headless architecture. This design allows you complete freedom to create the marketplace you want with the stability and functionality of a backend that’s already built for how a business does business.
Don’t Wash Dishes in the Washing Machine
Dishwashers and washing machines are both reliable pieces of equipment built to do their job exceptionally well. Dishwashers remove food particles and sanitize our flatware, dishes, pots, and pan.
Washing machines handle many loads of laundry with ease. From gently cleansing your most fragile fabrics to removing stains from jeans, your washing machine is up to the task.
But you would never expect your washing machine to clean the dishes.
So why would you expect B2C marketplace software to do the job of B2B marketplace software? It’s no more suited to the task than your washer is to cleaning your coffee cup.
Use the right solution for the job to be done. If you’re creating a B2B marketplace, use a B2B marketplace solution.