What is a B2B marketplace? and the best way to utilize it

Alibaba.com AUGUST 10, 202012 MIN READ
What is a B2B marketplace? and the best way to utilize it

Global business-to-business (B2B) eCommerce transactions totaled US $12.2 trillion in 2019, according to a Statista report1. One of the most prominent trends in B2B eCommerce is the rise of the B2B marketplace. The impact of this online marketplace model cannot be understated, as it redefined the business relationship between B2B buyers and sellers and acts as a networking point. As the trend continues to grow, it represents a huge opportunity for traditional B2B wholesalers and distributors to embrace the online marketplace model in order to get ahead of their competition.

So, what exactly is a B2B marketplace, what are the benefits of being part of it, and how do you sell successfully on it?

Table of Contents

Part 1: What is a B2B marketplace?

A B2B marketplace is a type of eCommerce platform that brings together B2B sellers and buyers and enables them to do business in one place online. Just like its B2C counterpart, businesses sell their products (usually in bulk with B2B) and other value-added services, but on a B2B marketplace, the sellers are brands, manufacturers, suppliers, and wholesalers, and the customers are other businesses. These transactions are processed online by the marketplace operator.

Depending on the different natures of B2B selling, a B2B marketplace can also be called other names, including a B2B trading platform, B2B procurement or sourcing website, B2B portal, multi-vendor marketplace, B2B catalog and directory, and more.

The meaning of B2B

Before we get into more details, let’s first review what “B2B” means.

The abbreviation “B2B” simply stands for “business to business.” It generally represents a business model that involves companies that perform services or provide products for other businesses rather than individual consumers. In recent years, the term has become synonymous with online trading and can also apply to Software as a Service (SaaS) products, B2B marketing companies, and other business supply companies.

If you are involved with an SME (mid-size enterprise), it is highly likely that you will interact with a B2B company at some point in your business life. That’s why it’s of high importance to gain a better understanding of the principle.

B2B compared to B2C, C2B, and C2C

To further investigate the definition of what a B2B company is, it’s useful to compare B2B with other types of sales such as B2C, C2B, and C2C.

  • Business-to-consumer (B2C), also known as retail sales, sells directly to individual customers. It is a simpler business transaction with lower volume, a fixed price, and less administration.
  • In consumer-to-business (C2B), consumers offer facilities and values for business to consume, such as customer reviews or influencer marketing.
  • Consumer-to-consumer (C2C) is when two individual citizens sell to each other. The classic example is the way eBay used to be at the beginning.

B2B companies have an entirely different target audience and offer the products, raw materials, semi-finished parts, finished parts, services, or consultations that other businesses need to operate, grow, and profit.

Let’s draw a closer comparison between B2C and B2B sales to help you understand why a B2B marketplace offers a different experience catering to the unique needs of B2B buyers and sellers.

B2C sales usually feature:

  • Spontaneous or quick purchases
  • Fixed pricing
  • Low-volume orders
  • Products are sold “as is”
  • Immediate payment
  • Simple shipment
  • Simple/no paperwork

B2B sales have the following complexities that differentiate them from the B2C model, which all need to be taken into consideration when building and managing a B2B marketplace.

  • Long purchase cycle
  • Price can vary depending on product changes and the quantity of items
  • Bulk sales usually; have the need for samples
  • Product can change: labeling, OEM, ODM
  • Different payment types and international payment issues
  • Logistics and distribution issues
  • Document and bureaucratic issues

The most well-known online B2B marketplaces

There aren’t a lot of notable B2B marketplace platforms out there today, mainly due to the intricacies of building the technology and gaining a trustworthy reputation over years. In no particular order, here are some of the top B2B multi-vendor marketplaces:

  • Alibaba.com
  • Amazon Business
  • eWorldTrade
  • Global Sources
  • ThomasNet
  • EC21
  • IndiaMart

It is worth doing more research to see if any of those top marketplaces have the buyer base and popularity, technology and tools, and other value-added services that serve your specific selling goals. Or, you may find other types of marketplaces in your niche.

Types of B2B marketplaces and their business models

There are different types of B2B marketplaces depending on the structure of the participants and other diverse factors.

Vertical versus horizontal marketplaces

Vertical marketplaces, also called “vortals” (vertical portals), specialize in a single category of products or a particular industry. Horizontal marketplaces sell products and services of different kinds, appealing to the needs of buyers across different segments or sectors.

One-to-many versus many-to-many marketplaces

A one-to-many marketplace is managed by a single purchasing company. For example, huge automobile companies like Nissan can set up an eCommerce marketplace where their suppliers can be granted access and submit bids and quotations for what they are requesting.

Many-to-many marketplaces may be more familiar to you, where buyers and suppliers are of different entities and the marketplace is managed by a third party. Alibaba.com and Amazon Business fall into this category.

Local versus global marketplaces

In terms of geography, we differentiate between local and global B2B marketplaces. While on local marketplaces, companies supply only to their local market, whereas global marketplaces facilitate the exchange of goods and services unrestrained by geographic boundaries. This poses a greater risk and challenges to run a successful global marketplace, as it has to tackle additional issues related to international payment, cross-border trade and logistics, language and communication barriers, and more.

Whether you intend to venture on your own B2B marketplace or sell with big B2B platforms, other important things to know about are the business models and sources of revenue for such a business. Here we list the three most common business models in B2B marketplaces:

Commission-based business model

For every successful order a seller gets from the platform, they pay a percentage as commission to the marketplace operators. The marketplace may charge different cuts depending on the type of products, category of products, order volume, value of the cart, and other trade variables.

Subscription-based business model

The marketplace charges a membership fee from the sellers to let them use its platform for business. This model is more common in gigantic B2B trade marketplaces with lots of repeat customers. The marketplace may offer some additional value in the subscription packages to attract more memberships. This could include dedicated account management services, greater visibility into products in catalog, access to exclusive categories, advertising features, logistics assistance, and more.

Listing fee business model

This model is more like pay-per-view, as is seen in video streaming platforms. The B2B wholesale marketplaces that follow this model ask sellers to pay an extra amount as a listing fee for posting a product to sell.

Part 2: Benefits for suppliers of being part of a B2B marketplace

Currently, 75% of B2B purchases are already made online2, and more and more businesses are leveraging online channels to conduct product sourcing and procurement. For suppliers, being part of a B2B marketplace represents a huge potential to take your sales and business to the next level.

If you are not convinced yet, keep on reading to learn more about the benefits of selling on a B2B marketplace.

Build your online presence

Digitizing your entire catalog already gets you ahead of a lot of your competitors who still adhere to the traditional in-person ways of B2B sales. By showcasing your products online, it increases your chances of reaching qualified buyers and closing big deals. It is also similar to being in a global trade fair which runs 24/7 and 365 days per year, and you are always present and visible.

Capitalize on existing buyer demand and expand your network

Millions of B2B procurement professionals are already actively shopping on top B2B marketplaces. The B2B marketplaces offer B2B buyers the convenience and confidence of engaging and purchasing from many verified and trusted suppliers on one centralized platform. If you don’t have the time and resources to invest in reaching customers across offline and online channels on your own budget, choosing to sell on a B2B marketplace can take the work off your plate and help effectively expand your network.

Low costs

The access to a B2B marketplace usually includes a low initial cost that any company of any size can afford, regardless of the business model of the platform, as in the structures of seller fees. It also gives suppliers the opportunity to decrease operating cost. They no longer need to update lengthy printed catalogs or spend money on traditional marketing channels.

Easy set-up

B2B marketplaces feature a standardized user interface and easy-to-use seller portal, where you can simply load your business and product information to get your online business up and running. Marketplaces integrate product management, CRM, shipment, and payment solutions or services. The development and integration of such sophisticated systems to your own website, instead, could be expensive and time-consuming.

Test out new products

Managing your products in a centralized online portal makes it easier than ever to get rid of obsolete inventory and SKUs. With a B2B marketplace, your own sales data can be readily accessible to help inform your product development or selection decisions. The marketplace portals often provide sales-trend insights and aggregated data for different segments or industries, so you may adapt to the sales trends and enjoy “first mover” benefits, especially in times of crisis.

Expand your customer base globally

Modern B2B trading marketplaces support localization settings and configurations. For example, they can display your products in different languages and integrate translation tools or services to the platform. They also offer solutions and services to take care of the complexities of international transactions and logistics. In this way, wholesalers and manufacturers can have the ease to access a wider range of audiences and develop new contacts all over the world, without the need for becoming an expert in cross-border trade themselves.

Access to foreign markets for SMEs

The low start-up costs of B2B marketplace platforms have allowed SMEs to start selling their goods and services internationally as no other has in the history of the business. Using a B2B eCommerce marketplace is an economical way to promote your products. Small businesses no longer have to take expensive trips around the world to secure business deals and can also display a wide array of products.

Increase customer service and loyalty

Good online B2B platforms help you facilitate connection and conversation with your buyers and let you own your business relationships. Digitized solutions allow you to manage your relationship in a more efficient way and timely manner. Less time spent on fielding leads and orders over phone and email will allow for more time to drive your business growth.

Part 3: How to succeed in a B2B marketplace

We’ve talked about the definition and types of B2B marketplaces. We’ve also explored the benefits of selling on a B2B marketplace. Now, let’s outline some strategies you can apply to ensure you sell successfully in a B2B marketplace.

Build trust

Do all steps necessary so the buyer on the other side of the globe who never meet you in person will believe in you. This includes:

  • Completing your company profile
  • Verifying yourself through verification or authentication processes
  • Showcasing other information that authenticates your business, such as certificates, licenses, awards, or photos of your factory, office, and employees.

Post and manage products

High-quality product posting helps you stand out from the crowd. Use descriptive keywords in your product name/title and descriptions to optimize for rankings within the marketplace platform. Use well-designed images and videos to attract buyers and help them develop a holistic understanding of your products.

Be flexible and adaptive

Flexibility will enable your business to thrive and evolve. Staying in touch with and adapting to your customer’s needs will give you a unique advantage. Such flexibility may include offering product customization, price modification, and personalized responsive services.

Offer logistics and customs clearance advice

Make sure that you can advise your customer on the best way that you can ship/ freight the delivery. Also, you can help customers gain knowledge of the rules and regulations required for the products to be exported into certain countries.

Respond to inquiries

Without inquiries, there can be no orders. So always make sure that you deal with inquiries in a professional, organized, and timely fashion.

Use feedback to optimize your offer

Positive feedback and testimonials can allow your business to gain trust and help to build your client base. Encourage your customers to leave feedback. Even negative feedback can help you understand what went wrong.

Offer sample products

Potential customers may prefer to check the quality of a product before making a bulk order. You can facilitate this by offering a product sample.

Respect your potential buyers

You will have to show respect, professionalism, and interest to any business regardless of the size of the company that contacts you. After all, if you serve them well you will grow together!

What to do next?

The competition is getting fiercer within the B2B space, while the opportunities are vast. For many, selling on a B2B eCommerce marketplace is a great way to expand your B2B network and grow your sales. It can be especially helpful for SMEs who have a limited marketing budget to gain the best possible results in the short- and medium-term.

So, what to do next? See our suggestions for further reading below:

Inquiry Reply Playbook

Intelligent Posting Playbook


  1. https://www.statista.com/study/44442/statista-report-b2b-e-commerce/
  2. https://www.sana-commerce.com/b2b-buying-process-2019-report-how-to-meet-b2b-buyers-demand/