Manufacturers contributed $2.17 trillion to the U.S. economy in 2015, according to the National Association of Manufacturers. With consistent growth, this sector is heralded as a major source of jobs, and economic development. But, many manufacturing firms and B2B distributors are faced with changes in the very fabric of how they do business - the way in which customers buy.

Face-to-face sales meetings and in-person account relationships are being upended by Google searches and a shift in buyer behavior to digital channels. 80% of B2B buyers expect the same level of convenience as received on B2C sites like Amazon (according to Accenture). Buyers want more convenience, more products available to them at a moment’s notice, competitive pricing, and high quality service, without having to wait for middlemen and manual phone calls, faxes, and emails.

A better procurement process

The Marketplace model simplifies the B2B procurement process in the same way that B2C Marketplaces do, working to improve the customer experience. It also improves productivity and decreases costs. By allowing customers to have a single transaction point versus a plethora of point-to-point relationships, the B2B buying process is simplified, streamlined, and easier to support.

The rise of agility

These B2B Procurement teams today are increasingly choosing to rely on agility as a way to fend off the threat of unpredictable supply chains and changing distribution environments. With agility, these teams can rapidly change sources, materials, suppliers, and logistics - and they seek this same agility in the manufacturers and distributors they choose to do business with.

At its core, the Marketplace model meets the needs of B2B manufacturers and distributors, who are under greater pressure than ever to find new, more agile ways of doing business to keep up with these changing customer expectations.

The Marketplace model offers B2B distributors and manufacturers:

  • Risk-free product assortment expansion
  • Extended community of vendors
  • More agile mechanism for traditional assortment expansion mechanisms like dropshipping

B2B marketplace successes

Global B2B eCommerce sales are projected to reach $7 trillion by 2020.  Many distributors know this, and see the digital arena as a tool for winning and retaining new customers.  B2B eCommerce promises to disrupt existing practices, and those that do not respond quickly risk losing out just as their B2C counterparts did to Amazon 10 years ago.

History could very easily repeat itself. Already, Amazon Business has achieved success, generating over $1 Billion in revenue in just its first year of existence.  Or take Alibaba - a flagship B2B marketplace. The core business model of this Chinese organization is to connect manufacturers and factories in China with Western companies wishing to buy low-cost products. Their Marketplace model facilitates transactions by offering services like supplier certification and price comparison tools.

Like the vast majority of Marketplaces, puts buyers and vendors in touch with each other without incurring the costs associated with supply management, storage, and shipping.  The success of Alibaba and Amazon Business perfectly illustrates the power of the Marketplace model to meet the needs of a market by simply facilitating the matching of fragmented supply and demand.

Do not ignore the revolution.

B2B Distributors and manufacturers cannot ignore this revolution the way their B2C counterparts did. Too many of those organizations wound up in the retail graveyard thanks to Amazon.  For B2B distributors, the marketplace model is the best mechanism for risk-free product assortment expansion, taking the dropship concept to a new, more scalable level.  For manufacturers, the model provides a way to create direct relationships with customers without creating channel conflict. The marketplace model is the the key to making B2B eCommerce as effective as possible.

Learn more about Mirakl for B2B companies.

Barry Murphy

Written by Barry Murphy

Barry Murphy is the Director of Content and Product Marketing at Mirakl. In this role, Barry leads the alignment of Mirakl's offerings to market needs for the next generation of online commerce. Barry previously ran product marketing organizations for X1 and Mimosa Systems (now part of HPE). Barry also had a highly successful stint as Principal Analyst at Forrester Research. Barry received a B.S. from the State University of New York at Binghamton and an M.B.A from the University of Notre Dame.

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