Blogs
Four Revenue Opportunities in Transforming B2B Marketplaces Payments
PUBLISHED ON : August 7, 2021
BY Nium Content Team
PUBLISHED ON : August 7, 2021
BY Nium Content Team
B2B marketplaces bring new, user-friendly functionalities to legacy industries like enterprise procurement and logistics, and these specialised marketplaces are on the rise as more B2B buyers turn to online channels in the wake of COVID-19.
With 62% of B2B businesses predicting earning at least 50% of their revenue through online commerce by 2025, there’s no better time to build and optimise your B2B marketplace to take advantage of opportunities presented by the growing, digitised demand.
However, simply setting up a B2B marketplace does not guarantee success. B2B marketplaces must adequately serve both sides of their market and foster good customer experiences and robust revenue models. They must improve the sector’s status quo and reduce friction, time, and effort spent in the typical B2B buying and selling experience.
Venture capitalist Bill Gurley said it best: “Great marketplaces do not simply aggregate a market; they enhance it.”
B2B marketplaces must facilitate trust and healthy competition. This takes committed work, but the payoff is exponential. Using their advantage of collective purchasing power, repeat customers, and network effects, B2B marketplaces help vendors sell more products or services than if they only sold through personal, siloed e-commerce channels. They also help buyers find and choose from a wide selection of sellers in less time.
While all this sounds promising, B2B marketplaces still face friction in both getting off the ground and thriving.
Below are four key areas we’ve identified where B2B marketplaces struggle:
Let’s tackle these challenges one by one.
Slow purchasing cycles often stem from delayed decision-making caused by too many stakeholders and tedious processes. This slows the buying process and sometimes halts it completely.
A civil engineering project, for example, may need to procure over 200 products to kickstart. The procurement manager would call up at least three vendors for quotes for each product and then pass these on to decision-makers before moving forward.
B2B marketplaces can turn this cumbersome process into a revenue opportunity by simplifying the platform’s process, offering an array of sellers and reducing the back-and-forth between both sides.
By displaying needed information based on the actions taken by the buying and selling parties, B2B orders are placed automatically. The next step or associated payment is triggered, saving time and effort for buyers and sellers.
Typically in B2B buying, common challenges like complex ordering, reordering, fulfilment requirements, and refund issues make it difficult to get business done.
New B2B marketplaces reduce this friction by tracking the right metrics and data. They leverage this data to make the customer experience on their platform smoother for buyers and sellers.
When a marketplace embeds payments into their business flow, they’re able to track and utilise data from customer behaviour, e.g., top-selling categories, purchase histories, different location-buying, and many other benefits – all of which provide insight that can boost marketplace revenue.
According to a 2020 report by Mirakl, 80% of B2B buyers expect a convenient buying experience similar to what they get on B2C websites. Online buyers have been conditioned to expect personalisation, autonomy, and speed – and B2B marketplaces have work to do to catch up to this.
Gated pricing information, for example, is a stumbling block to a smooth customer experience. On the other hand, dynamic pricing opens up more possibilities and is more sticky for B2B buyers.
When a buyer logs into a marketplace for the first time, offering a profile and login allows marketplaces to personalise products, recommendations, and pricing for various customer groups. This removes the limitation of traditional gated and custom pricing protocols.
Most B2B marketplaces have been restricted to operating in specific geographical areas due to financial compliance. With the race to digitisation, new fintech solutions, and the global adoption of e-commerce, marketplaces can expand operations beyond their region.
With embedded cross-border payments, these companies can hire talent globally and expand the business without having to open physical offices across the world.
Whereas before, hiring from or operating in different regions was tough; now, B2B marketplaces can scale quickly and securely by integrating with the right partners like Nium.
B2B buying has been a closed, fragmented space for a long time, but this is changing rapidly. Marketplaces looking to differentiate themselves must create a platform that prioritises offering an easy and delightful experience for both sides of their market.
The beauty in the struggle is that there are new, rich revenue opportunities hiding within most of the challenges B2B marketplaces face. The future goes to the marketplaces that accept these challenges and work towards optimising their platforms to serve global markets.
Are you a B2B marketplace looking to tackle these challenges with smart, embedded financial technology? Partner with Nium to achieve your goals and simplify your operations across key markets.