A new study projects that by 2024, about 30% of all worldwide online B2B sales will be done on B2B online marketplaces and that global sales on these platforms could reach as high as $3.6 trillion. What’s driving this growth and what do business leaders need to know to take advantage of it?
B2B marketplaces are the domain of the procurement professional. As that role within organizations has evolved recently, so have the tools procurement professionals use to deliver goods and services to their enterprises. Spurred on by increased pressure to be not just cost savings departments but strategists and innovators as well, today’s procurement professionals are looking to advanced B2B marketplaces to help drive down costs, increase efficiencies, and build stronger supply chains.
It’s critical that business leaders no matter where they sit in their organization know what success looks like on a b2b marketplace looks like and how to achieve it. Here are four key benefits to keep in mind.
When buyers become too reliant on one or two suppliers they are at the mercy of whatever those suppliers want to charge for their goods and services. Having multiple suppliers in a network means buyers can shop around for exactly what they need at the price they want to pay. But B2B marketplaces with many buyers and suppliers work better for suppliers too: when a buyer doesn’t pay on time or reduces its order from a supplier, that supplier has access to a network of qualified buyers it can turn to in an instant to fill the gap.
Another benefit of joining an open buyer-supplier ecosystem is the opportunities it can create for partnerships across the end customer buyer’s journey from joint marketing, and sales to co-innovation itself. The b2b marketplace commercial models being tried out today defy the constraints of the original one-size-fits-all approach in favor of far more dynamic prototypes that stimulate growth and innovation and increase profitability.
Modern B2B marketplaces make supply chains more resilient because they connect many buyers to many sellers at once, it’s that simple. The one-to-many model reduces buyers’ dependency on a single supplier and means less distress to the supply chain when a supplier fails. To see proof of how this, simply look at the headlines: COVID, endless war, climate change—we’re living through a period of massive disruption with no end in sight. Going forward, buyers who can pivot more easily when, say, a lockdown in China forces the closure of a critical supplier, will be at a distinct advantage over their competition.
But open collaboration isn’t just about having access to more suppliers, it’s also about creating more transparent supply chains by sharing data and using that data strategically. Many B2B marketplace operators today are adding the capability to analyze data from their members in real-time and deploying AI to spot trends or problems so members of their community can be prepared. According to this recent IDC whitepaper, 38% of manufacturers in Europe said that participating in B2B marketplaces delivers benefits related to easier access to suppliers and providers, and for 43% it provided greater supply chain visibility.
As enterprises continue to demand more of their procurement department, professionals within those departments are naturally searching for more sophisticated tools to help them do their job. Newer B2B marketplaces which stress the importance of one-to-many relationships, transparency, and open collaboration are poised to play a transformative role for every business on the platform.