Six Reasons to Use a B2B Marketplace
By Nowshade Kabir ©Rusbiz.com
Considering their features and capabilities B2B marketplaces are still quite
underused. However, the trend is changing and many companies started to realize
the immense potential these promising online channels store. Now the common view
is adoption of a marketplace as a sales or purchase channel will change the way
a company handles its sales and procurement bringing improved productivity and
sustained profitability to its bottom line.
What is a B2B marketplace?
Business to business marketplace is an online venue where buyers and sellers
come to communicate, collaborate and do business transactions. A B2B marketplace
handles a large number of participant companies as a community. The main
objective of a marketplace is to organize a business platform filled with
features that allows members to conduct various business processes over the
Internet and increase company productivity.
Two primary indicators of company productivity are Increased Revenue and Cost
Saving. Both of these two indicators will show improved result if a company
incorporates marketplace features in possible fields of its business operations.
Let’s check out some compelling reasons why companies should start using B2B
marketplace without hesitation:
1. B2B marketplace is a large community of buyers and sellers
By becoming a member of a B2B marketplace companies get instant access to
thousands of prospective buyers and supplier. An average B2B marketplace has
over 100 thousand members. This gives an opportunity to expand business by
finding new customers and suppliers from this new community. Workings closely
with the members of the new community companies get every chance to increase
their businesses dramatically.
2. Real time marketplace allows buyers to take quick decision
Buyers can study, compare and research a product offered on a marketplace
without leaving the marketplace. This ability of a B2B marketplace to give key
information necessary to make a purchasing decision helps buyers to take a
faster buying decision.
Study shows that a full 47 percent of the buyers visit a site without having all
the necessary information needed to purchase a product. Products offered on a
marketplace are integrated with the eCatalog and seller’s Web Store. This helps
to increase buyer conversion rate significantly.
3. Sophisticated eCatalog helps display comprehensive product features
An eCatalog is an Online product content management solution with powerful user
interface which provides efficient navigation, searching and integration
capabilities to organize and publish product information and enable real-time
handling of business processes related to buying and selling.
It stores product content in a single database and organizes product information
under a predefined categorized hierarchy. It also has sophisticated search
capabilities so that buyers can locate products easily.
Studies show, in many cases, buyers are unable to take conclusive procurement
decisions due to poor content of the product resulting lost business opportunity
for companies. To avoid this all B2B marketplaces adopt one kind or another
advanced eCatalog system which delivers a compelling value proposition. As a
result, companies can expect increased revenue, better customer satisfaction,
and shorter sales cycle.
4. Sales solution expedites selling process and reduces overhead costs
The sales chain integrated to a B2B marketplace covers every stage of selling
process including quotation, negotiation, billing and shipment tracking.
Electronic sales process considerably reduces sale’s cycle enabling lower
processing costs. Electronic sales solution also helps minimizing document
errors often associated with paper based systems.
5. eProcurement solution makes buying easier
Electronic procurement is the method of conducting transactions between buyers
and suppliers over the Internet. An eProcurement system is an integral part of a
B2B marketplace. Procurement through a B2B marketplace has many undisputed
advantages. Transaction costs get reduced thanks to streamlined transaction
process. It saves time and stops rogue spending by employees.
Aberdeen Group estimates that automating procurement activities will save
midsize companies $2 million per year. And that's not to say anything of the
cost savings resulting from better supply chain collaboration.
6. Web Store brings new opportunities to company’s retail business
While through the marketplace you can tap into the wide range of B2B buyers, B2B
marketplace feature that allows participant companies to build their web store
using the same eCatalog gives a magnificent opportunity to target a totally
different market segment. This by itself is a unique opportunity as recent
studies showed that an increased number of small companies with less than 20
employees are making more than 25 percent of their sales online.
There are other benefits that a company can recieve from participating in a B2B
marketplace as well.
For buyer participants a B2B marketplace offers:
- Lower transaction costs – streamlined transaction processing.
- Access to new suppliers – B2B marketplace participation removes
geographical barriers and provides access to new suppliers.
- Time savings – provides for faster approval, ordering processes and
delivery tracking.
For suppliers, it offers:
- Reduced inventory costs – Clearer visibility and forecasting
ability allow companies considerably reduce inventory keeping costs.
- Access to new buyers and markets – B2B marketplace provides a new
sales channel which opens up many new opportunities for suppliers.
- Increased sales – with access to a wider market, suppliers have
the potential to increase revenue.
- Reduced overhead costs – Thanks to streamlined supply chain
overhead costs can be reduced up to 30 percent.
- Reduced order processing costs – The supply chain solutions of a
B2B exchange may allow sellers to reduce order processing cost significantly.
Studies show that cost of processing a purchase order can be reduced from
US$ 70 down to US$ 6 only.
- Reduced sales and support costs – By automating sales and
customer support processes companies can reduce over head costs around
25-30% easily.
B2B marketplaces are one-stop business solutions for many of the company’s needs.
Usually a marketplace offers a huge range of features and functions. Participant
companies can select required functionalities, use them effectively and reap all
the benefits mentioned above.
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