Six Reasons to use a B2B marketplace

By Nowshade Kabir

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 which 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 allow 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 suppliers. 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. Working 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 receive
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.

About the author:
Nowshade Kabir is the founder, primary developer and present
CEO of Rusbiz.com. A Ph. D. in Information Technology,
he has wide experience in Business Consulting, International
Trade and Web Marketing. Rusbiz is a Global B2B
eMarketplace with solutions to start and run online business.