It’s no secret that B2C eCommerce has exploded in popularity over the last 2 decades and become the default way to trade for many merchants: In 2023, eCommerce accounted for 19% of retail sales worldwide.
But B2B eCommerce has seen unprecedented growth in recent years too, reaching an estimated value of $20.4 trillion in 2022 - a staggering 5 times bigger than the B2C market. This has been driven, in part, by the rise of innovative online marketplaces. These digital platforms are reshaping the way companies connect, collaborate, and transact.
Forward thinking enterprises are recognising the immense potential of B2B marketplaces to streamline operations, enhance competitiveness, and unlock new revenue streams. In this article we’ll cover the core concepts and share guidance for merchants looking to build or grow a B2B marketplace.
What is a B2B Marketplace?
A B2B marketplace is an online platform that facilitates transactions between merchants and buyers, enabling them to connect with a wide range of pre-approved suppliers, vendors, and service providers.
B2B marketplaces can cater to a diverse range of industries, from manufacturing and retail to professional services and logistics. By aggregating a vast selection of products, services, and data, B2B marketplaces offer businesses a convenient and efficient way to source, compare, and purchase the resources they need to thrive.
An Opportunity for Forward-Thinking Enterprises
Long negotiations, intricate, paper-based procedures, and a strong dependence on interpersonal connections have long been hallmarks of B2B transactions. But now a more efficient and open B2B environment has been made possible by the emergence of digital technology and the shifting expectations of a new generation of tech-savvy workers. The ease, effectiveness, and data-driven insights that B2B marketplaces provide are being embraced by businesses more and more, which is propelling this industry to explosive expansion.
The Emergence of Vertical and Horizontal Marketplaces
Within the B2B marketplace ecosystem, two distinct models have emerged: vertical and horizontal marketplaces.
Vertical marketplaces specialise in specific product or service categories, catering to the unique needs of a particular industry, such as Meatex in the meat industry or Fractory in the metal fabrication sector.
Horizontal marketplaces, on the other hand, offer a diverse range of products and services, appealing to a broader audience of businesses across multiple sectors, like Amazon Business or Alibaba.
The Compelling Case for B2B Marketplaces
The Massive B2B eCommerce Market
The sheer size of the B2B eCommerce market presents a compelling opportunity for businesses and marketplace entrepreneurs alike. In 2021, the global B2B eCommerce market was valued at a staggering $20.7 trillion, 5 times bigger than the B2C eCommerce market. This vast market potential, combined with the relative lack of digital transformation in many B2B industries, underscores the immense untapped potential for B2B marketplaces to disrupt and revolutionise the way businesses transact.
Tapping into Fragmented Markets
Many B2B industries are highly fragmented, with numerous small and medium-sized suppliers lacking a strong online presence. B2B marketplaces can serve as a centralised platform to aggregate these dispersed suppliers, making it easier for buyers to discover and connect with the right providers. By bringing together a diverse range of offerings, marketplaces can unlock new opportunities for businesses to access a wider range of products, services, and expertise.
Increased Buyer Loyalty
B2B marketplaces provide an opportunity to increase loyalty with sellers & buyers. Providing a specialised, personalised service for buyers looking for goods/services within a niche market helps build a competitive differentiation. The transparency offered by these platforms, such as real-time pricing and availability information, can help businesses make more informed purchasing decisions. Marketplaces that successfully connect buyers and sellers in the same industry can become critical platforms for both parties and core to their trading performance.
Catering to Changing User Expectations
As a new generation of digitally-savvy employees enters the workforce, their expectations for seamless, user-friendly technology are spilling over into the B2B realm. B2B marketplaces that offer intuitive, consumer-like experiences can cater to these evolving user preferences, providing a level of convenience and functionality that traditional procurement processes often lack. This alignment with modern user expectations can drive increased adoption and loyalty among B2B buyers and sellers.
Navigating the Challenges of B2B Marketplaces
Monetizing the Marketplace
Determining the optimal monetisation strategy for a B2B marketplace can be a complex undertaking. Marketplace operators must carefully balance revenue generation with providing value to both buyers and sellers. Potential monetisation models include transaction-based commissions, subscription fees, and value-added services, such as financing or logistics support.
Building Trust and Credibility
In the high-stakes world of B2B commerce, trust is paramount. Marketplace platforms must invest in robust supplier vetting processes, secure payment options, and transparent communication to assure buyers that they are engaging with reliable and trustworthy partners. Earning the trust of both buyers and sellers is a continuous process that requires a steadfast commitment to quality, transparency, and customer service.
Streamlining Complex B2B Transactions
One of the primary challenges faced by B2B marketplace operators is the inherent complexity of B2B transactions. Traditional B2B transactions often involve intricate processes, including negotiation, contract signing, and the exchange of certifications and documents. There are ways to streamline complex payment journeys, automating and digitising various steps to enhance efficiency, reduce errors, and provide a seamless user experience for both buyers and sellers. By addressing the unique challenges of B2B transactions, marketplaces can unlock significant productivity gains and cost savings for their users.
For merchants looking to provide credit terms via a seamless buyer experience, PayLater with Kriya provides the perfect solution. Merchants are able to offer flexible payment options including pay by instalments & extended payment terms, while Kriya handles the complexity of authentication, onboarding buyers & collecting payment. The merchant even receives the payment upfront, mitigating any risk of non-payment.
Customising the User Experience
B2B buyers often have unique procurement processes, payment requirements, and integration needs. Marketplace platforms must be highly customizable, allowing buyers to tailor the user experience to their specific needs. This may involve integrating with existing enterprise resource planning (ERP) systems, offering specialised pricing and billing options, and providing advanced search and filtering capabilities.
Leveraging Technology to Build Successful B2B Marketplaces
Embracing No-Code and Low-Code Platforms
For entrepreneurs and businesses looking to launch a B2B marketplace quickly and cost-effectively, no-code and low-code platforms can be a game-changer. These solutions provide a range of pre-built features and functionalities, allowing marketplace operators to focus on their unique value proposition rather than spending significant time and resources on core platform development.
Harnessing the Power of APIs
For merchants that have more specific requirements in terms of buyer experience & integration with existing business systems, application programming interfaces (APIs) play a crucial role in the development of B2B marketplaces. APIs enable seamless integration with third-party systems and the customisation of the platform to meet the unique needs of merchants. By leveraging APIs, marketplace operators can build flexible and scalable solutions that can adapt to the evolving requirements of their B2B customers.
As we’ve covered, payment processes are one of the highest priority areas to address for marketplace businesses and are a great example of where API solutions can be put to use effectively.
Using API integration options with payment providers provides marketplace enterprises the flexibility to customise the user experience, aligning it with their brand identity. From the colour scheme to the messaging, companies can ensure a seamless and consistent branding throughout the buyer journey, strengthening their brand image and increasing buyer affinity.
The entire payment journey can be customised so you can provide checkout experiences according to your buyer preferences.
Leveraging Headless Architecture
Headless architecture, where the frontend and backend of a marketplace platform are decoupled, offers B2B marketplace operators greater flexibility and control. This approach enables the customization of the user experience within the marketplace, the integration of specialised features, and the seamless scaling of the platform to meet the demands of growing B2B ecosystems.
Ensuring Secure and Compliant Transactions
B2B transactions often involve sensitive financial information and regulatory compliance requirements. Marketplace platforms must prioritise data security, encryption, and adherence to industry-specific regulations to build trust and mitigate risks for their users. Partnering with reputable payment providers and implementing robust security measures can help B2B marketplaces maintain the confidence of their buyers and sellers.
With Kriya, we handle the authentication process including; buyer verification, credit checking, credit limit setting and payment collection. Merchants are paid upfront for transactions while buyers are able to pay on their own terms.
- Instant buyer authentication & spending limits set by Kriya
- Offer buyers flexible payment terms
- Kriya pays you in full on delivery of order
- Kriya takes on the risk & handles payment collection
Learn more about authentication with Kriya
The Value of Offering PayLater Options
Providing flexible payment options can be a game-changer for marketplace operators and their users. Trade Credit has always been integral to B2B payments - an agreement whereby buyers are allowed to purchase goods & services but pay the merchant later on an agreed time scale. But new solutions are modernising these kinds of agreements to the benefit of both sides of a transaction.
One such solution is the integration of PayLater (or Buy Now Pay Later) functionality, which allows B2B buyers to access trade credit and pay for their purchases in instalments.
Enhancing the Buyer Experience
By offering PayLater options, B2B marketplaces can provide their buyers with greater financial flexibility and control over their cash flow. This can be particularly beneficial for smaller businesses or those with limited access to traditional credit lines. The seamless integration of PayLater into the purchasing process can streamline transactions and reduce the administrative burden for buyers.
Mitigating Credit Risk for Sellers
For B2B sellers, the integration of PayLater can help mitigate the credit risk associated with extending trade credit to their customers. Marketplace platforms can leverage their position to perform credit checks, authenticate buyers, and facilitate automated payment collection, ensuring that sellers are paid upfront while buyers can take advantage of flexible payment terms. Kriya takes on the risk of all authenticated transactions.
Strengthening Marketplace Stickiness
By providing a comprehensive suite of payment options, including PayLater, B2B marketplaces can enhance the overall user experience and increase the likelihood of repeat business. Satisfied buyers who appreciate the convenience and flexibility of the platform are more likely to continue using the marketplace for their future procurement needs.
Successful B2B Marketplace Case Studies
Meatex levels out the meat industry playing field
Meatex champions the small guy. The meat industry has seen a lot of consolidation and mergers in recent years, resulting in fewer, bigger companies focused on supermarkets. This means smaller businesses have been squeezed out. Meatex exists to give all of their customers – retailers, wholesalers, caterers and manufacturers – equal access to the best products and prices in the industry.
Breaking away from the old-fashioned ways of the industry, Meatex embraced technology, making it as easy as possible for customers to buy from them. They consider themselves a gateway to the big players in the meat industry, leveraging their great level of buying power to access the best products at the best prices and pass it along to their customers.
One of the key features of their platform is the amazing customer experience – the whole Meatex team has years of expertise in the industry. They’re only a phone call away, ensuring every customer can get the information and personalised service they need.
Fractory: a one-stop-shop B2B marketplace for on-demand manufacturing services
Fractory is a leading on-demand manufacturing platform that offers a comprehensive range of services to businesses of all sizes. With their one-stop-shop approach, Fractory enables customers to discover, compare, and fulfil production orders efficiently, regardless of batch size. By partnering with companies equipped with specialised manufacturing equipment, Fractory optimises the utilisation of available capacity, helping businesses accelerate their return on investment for expensive machinery investments.
Their model is a bit unusual for a marketplace as they’re a seller themselves. They collect orders from the buyer, find a fitting supplier and resell the product to the buyer.
Are You Innovating or Leaving Money on The Table?
Give buyers the choice to pay on their own terms and provide a seamless checkout experience with Kriya Paylater. We handle the transaction from end-to-end, with a frictionless buyer journey.
- Instant buyer authentication & spending limits set
- Flexible payment terms
- Kriya pays you in full on delivery of order
- Kriya takes on the risk & handles payment collection
PayLater is driving real growth for our merchants:
- 40% Buyer Adoption
- 2x Likelihood of repeat orders
- 45% Revenue Growth
- 4x Increase in acquisition of new buyers
Talk to our team today to find out more about how we can help you
