The Unstoppable Growth of B2B Marketplaces in 2022

The COVID-19 pandemic forever changed how buyers want to engage with sellers. A younger, more digital-oriented, rapidly growing audience wants to do business online and on marketplaces. 

B2B marketplaces are now the fastest-growing channel in B2B eCommerce. Research reports show sales on B2B marketplaces increased by 131% to $56.5 billion in 2021, and they are projected to rise further to $130 billion in 2022.

According to Bowery Capital, despite the challenging economic conditions, investors continue to pump funding into B2B marketplaces. In 2021, about 111 deals were realized, and by May 2022, a total of 63 deals had already been closed. In 2019, there were close to 100 B2B marketplaces. Today, there are 400 commercial and vertical B2B marketplaces spread across 18 industries ranging from chemicals, automotive parts, energy, and construction supplies to logistics and labor.

Why have marketplaces become so crucial to B2B companies lately? Marketplaces can be an optimal channel option for both sellers and consumers. B2B buyers strongly believe that buying for work should be as easy as buying for themselves. So they’re turning to marketplaces to avail themselves of the secure, optimized, frictionless B2C-like experience they’re used to day in, day out. 

What is driving the growth of B2B marketplaces?

• Rapidly evolving consumer behavior: B2B buyers are buying more like B2C consumers. In other words, the path to discovery and buying is turning out to be more diverse. In the past, a customer used to call their sales representative or sign into a proprietary portal. However, times have changed. Now they search on Google, Amazon, manufacturer websites, and specialty marketplaces. While some established marketplaces such as Amazon Business focus on B2B, other organizations have started their own marketplaces to increase options and offer multiple complementary products and services to their customers. 

• Direct access to multiple suppliers: B2B marketplaces have opened an avenue for buyers to have direct access to suppliers. In fact, this means not just access to suppliers but multiple suppliers at once, so the powerful demand results in competitive pricing. In addition, the consumer shift towards eCommerce is creating an explosive growth opportunity in the B2B space. 

• Improved customer experience: B2B companies are looking for ways to offer enhanced customer experiences to eliminate competition. Marketplaces have made it easy for them to offer their customers a one-stop shop. Marketplaces allow B2B companies to offer more flexibility around the supply chain while offering B2B buyers more product options. For instance, a famous auto parts company recently implemented a marketplace to create a one-stop shop for its B2C and B2B customers. The company has brought all its distributors and partners onto the marketplace, where buyers can buy both digital and physical goods from a single location. In general, auto suppliers and the auto industry have seen great success adapting their business models to deliver the B2C buying experience. Ultimately, your marketplace becomes a community where your buyers know they can get all they need to use your product successfully. It ties their success to your success and vice versa, inspiring brand loyalty.  

• Lack of price and inventory transparency: Most of the branded manufacturers selling through channel partners are searching for first-party data to make informed business decisions. They need price transparency since companies in mature markets require price optimization capabilities that they lack today due to the unavailability of real-time price data. Without inventory transparency, it becomes challenging to gauge the amount to produce in the next batch. Transparency allows vendors to take demand forecasting to the next level. 

What are the typical challenges faced by B2B companies when implementing marketplace initiatives?

Sellers need centralized strategies for repricing, advertising, product data optimization and syndication, reporting and analytics, and connections to order fulfillment and shipping partners. Deciding the best marketplaces for your products is a basic challenge. It is easy to say that you plan to list on 50 marketplaces, but each comes at a certain cost — advertising costs, warehouse fees, shipping products overseas, and various other expenses.