On these platforms, businesses put out their products in order to connect with their consumers.
Consumers browse through the products and select based on their preferences, be it needs or wants. They pay for it and have the items shipped to their homes.
This is a process that most of us are all too familiar with.
But aside from our widely used B2C marketplaces, there are also those which are called B2B marketplaces. These types of marketplaces have different models.
What is a business-to-business (B2B) model?
In the B2B model, businesses transact with each other in a marketplace or a platform which creates a business-to-business interaction.
Take Alibaba as an example. It is an e-commerce company that allows businesses to buy products in bulk from manufacturers and suppliers on their platform.
Meanwhile, their sister company, AliExpress, is a B2C version of Alibaba. The items on the platform can be purchased individually by their customers.
What are B2B Marketplaces?
B2B marketplaces can only be accessed online. Businesses set up a platform for buyers, suppliers, or both.
Have you ever wondered how a B2B marketplace operates? Let’s find out by defining each type.
What are the types of B2B marketplaces?
The three main types of B2B marketplaces are:
(1) Supplier-oriented marketplace:
(2) Buyer-oriented marketplace; and,
(3) Intermediary-oriented marketplace
Let’s talk about each one in more detail.
In supplier-oriented marketplaces, there are a few suppliers and many buyers. This type is also called eDistribution or supplier directory.
This online marketplace is dictated by a number of suppliers who put out the prices of their products based on the needs of the buyers.
Cisco’s marketplace called Cisco Connection Online is an example of a supplier-oriented marketplace. Suppliers are present on the platform and allow a great number of buyers to browse through their products.
This model does not only allow the suppliers to gain income, but it also increases their reach in the market.
The buyer-oriented marketplace is also referred to as eProcurement. In this type, the market is driven by suppliers while there are few buyers.
This model can be easily understood by thinking of it as a bidding platform. An example would be GE’s electronic bidding site which is known as GE TPN Post.
Buyers will pay a nominal fee and post their project requirements on the website. Suppliers on the platform who will meet the requirement will make bids for the project. The buyer will then screen the bids and pick the supplier that best suits their requirements and budget.
In intermediary-oriented marketplaces, the owner acts as a third-party system allowing buyers and sellers to transact on their platform
This marketplace enables the suppliers or vendors to present their products on the platform while the buyers or the clients find the products or services that they need.
Mangtas is an example of an intermediary-oriented marketplace.
Businesses, both buyers and sellers, sign up on the platform as clients or vendors. The platform enables the clients to browse through the list of vetted vendors and their outsourcing services, acting as a middleman for the clients and vendors to come up with a beneficial partnership.
The best model for your B2B Business
Do you have a business idea that seems to fall under these categories?
To figure out which model would work best for your B2B business, you would need to start identifying what your role would be between your buyers and the suppliers.
You can create your platform to:
(1) be an avenue for suppliers to showcase their services (a supplier-oriented marketplace);
(2) help buyers find solutions (a buyer-oriented marketplace); or,
(3) be the bridge for both buyers and sellers (an intermediary-oriented marketplace).
Once you find out which role you want to play, it should be easy for you to know which model would work best for your B2B business.
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