How to Start a B2B Marketplace ( guide 2021 ) #ExceedTeamInc

HOW TO START A B2B MARKETPLACE

8 min

Dec 14 2020

Nikita LExecutive Director

Danil LWeb Developer

In today's world, the B2B business model is just starting to take off. More and more entrepreneurs worldwide see imperfections of the cooperation system in various business areas. This phenomenon encourages them to seek solutions and improve their businesses’ performance.

Table of contents

B2B: features of the "business for business" system

Successful B2B Application Examples

How to define the distinctive idea and purpose of the project?

B2B business models and their monetization opportunities

Steps to Create a B2B Marketplace

Step 1. Describe the idea and all the details in the project documentation Step 2. Select a development team Step 3. Control the stages of the project Step 4. Preparing for an advertising launch Step 5. Extend the application

Let's discuss your idea

B2B: FEATURES OF THE "BUSINESS FOR BUSINESS" SYSTEM

The first feature of the B2B model is the frequency and volume of transactions made in the market. The second feature of B2B is its different sectors. Every entrepreneur who decides to work in B2B can choose a suitable sector for themselves, make their own unique changes, and maybe even create a new industry.

At the moment, there are three main sectors.

B2B Marketplace for Buyers and Sellers (e-commerce platform). Such platforms allow entrepreneurs to buy and sell goods in bulk (less often at retail). This system is the most popular of all. For example, Amazon, Alibaba, eBay, and others are already working on its basis. They have already formed consumer expectations from the application, and it provides a guideline for everyone who wants to develop this kind of application.

The list of common features for such an app:

Sign Up and Sign In;
Online payment (via payment systems);
Customers reviews;
Admin panel;
Tracking orders;
Shopping basket;
Inventory management tools;
Statistics;
User lists and ratings;
Search console such as Elasticsearch;
Possibility of goods reservation;
Payments delay.

Some of these features can appear only in specific applications, but in practice and our working experience, entrepreneurs appreciate the breadth and variety: payment forms, tools and advertising opportunities.

Marketplace for B2B services. This segment of the B2B business model is also quite popular. Its pattern is presented this way: people and entrepreneurs come to the platform, ready to provide their service to other entrepreneurs, including prominent businessmen, representatives of medium and small businesses, and even freelancers. The expected functionality is similar to the described above. The only difference is that you may not need tools as location tracking, inventory management tools, or a shopping cart.

B2B rental marketplace. This B2B segment allows organizations to lease placements, equipment, vehicles, and other assets. This type of marketplace requires almost the same set of tools as in the first case.

SUCCESSFUL B2B APPLICATION EXAMPLES

In each of the above sectors, there are examples of successful applications, set the market trend and create consumer expectations.

E-commerce platforms: Amazon, Alibaba, eBay, and others.
B2B services marketplace: Thumbtack, Fiverr, Upwork, and others.
B2B rental marketplace: Airbnb and others.

These leaders set the general trends in the world market; in other words, how exactly B2B platforms should look and function.

In the e-commerce sector, some notable trends in user-experience and monetization were demonstrated by the following companies.

Alibaba:

allows sellers to sign up for free with no transaction fees;
revenue comes from advertising, marketing tools, and subscriptions;
organizes keywords auctions among sellers.

Amazon:

The primary income comes from retail, subscriptions, and web services contained in the application.

eBay:

takes a fee for using the platform;
conducts auctions for goods;
carries out paid promotion of goods categories within the platform.

The most popular service platforms work this way:

Thumbtack:

selects a service provider in a particular country. If the service can be implemented remotely, then the employer can contact performers from other countries;
earns from a percentage of the transaction, advertising, and additional platform features;
collaborates with entrepreneurs, freelancers, and individuals.

Fiverr:

collaborates only with freelancers. The company has created a platform where freelancers can come offering their services;
one can post tasks for freelancers to respond;
earns on advertising, the percentage of orders placed and response to them, and additional features

Upwork:

provides its users with a global job search platform and many software tools for employers to improve these collaborations.

At the moment, platforms for services providing and promotion continue to appear.

Rental platforms are functioning this way:

Airbnb:

provides short-term rental housing anywhere in the world;
earns from commissions for placement and advertising.

Before creating a rental marketplace, it’s necessary to understand that such services have a low retention rate.It means that when a user finds a placement or a vehicle, it may not need again in a visible perspective. Also, a distinctive feature of B2B rental sites is that they can work as a B2C service at the same time.

Having studied the market leaders, you can create your list of features suits your application. However, the final feature set will be determined after defining the project’s ideas and goals.

HOW TO DEFINE THE DISTINCTIVE IDEA AND PURPOSE OF THE PROJECT?

Many applications in the world copy the functionality and idea of market leaders in various fields. This did not escape the B2B system either. However, full copying will not help anyone who wants to create such a site without an original idea.

An original idea is what identifies your business from competitors and builds a unique interaction with your customers.

Therefore, before creating software, you should think about the corporate idea and message. Many entrepreneurs find it difficult at this stage, however, according to the experience of Exceed Team's specialists, the original idea of the project can be found by taking a pen and paper and answering the following questions:

What are the problems in cooperation between business partners?
What causes these problems?
What is the possible solution to these problems?
How can this solution be presented to the masses using the marketplace?

Brainstorming these questions will allow you to find an original idea for creating a unique B2B system application and many others. Once you've formed your business idea and goal, it becomes easier to figure out how to move forward.

However, the goal of any business is to make a profit. What sources of revenue can a B2B app provide you?

B2B BUSINESS MODELS AND THEIR MONETIZATION OPPORTUNITIES

Deciding exactly how your application will earn is one of the most important tasks. One earning scheme can push away your potential clients, while another one can attract.

Part of how B2B app leaders make money has already been discussed above, but it's worth reviewing the possible types of monetization separately.

Transaction fees. This income is received by the site in the form of a percentage or a fixed amount from each transaction. This model is the most widespread in the world today and provides sites with a high level of income. If you are attracted by this type of income, then you still need to decide: will the percentage for transactions grow with an increase in its amount? Or will it be a fixed price? Many sites choose the first option, because with the influx of users, the size of the transaction amounts can grow, due to which a fixed price collection can reduce your profit.
Subscription. For creating an account, some sites allow the client to interact with the tools and basic functions of the site only if he pays for a subscription. Some applications are ready to provide a choice:

One-time fee for responding to a service / placing an order for a service (applications for a product);
Weekly / monthly subscription;
Semi-annual subscriptions with additional features.

The latter option is rarely introduced. This is due to possible price changes and a mismatch in the exchange rates of the country providing the application and its users. There are also software that can combine both ways of earning.

Advertising. Gaining popularity, the site attracts more and more users. Сompeting with each other, sellers may want to stand out and attract more potential customers for their products. Also, other entrepreneurs, seeing the potential of the application, can offer advertising placement within the site. All these opportunities act as additional income for your business.
Additional functions. Similar to eBay and Alibaba with their auctions or Upwork with geolocation and advance reservations, you can come up with a unique offer. This offer can turn into an additional feature of the site due to which buyers will return to the software again.

Additional functions may include software stacks that speed up document flow between entrepreneurs, help to better build a pricing policy, etc.

Determine exactly how you want to make money from your application, best of all during idea creation, definition of type and functionality. What functionality is at the heart of certain applications - it was discussed above in the article.

However, it is worth talking about the nuances of their creation separately for each type.

STEPS TO CREATE A B2B MARKETPLACE

If you decide to create a B2B Marketplace, provide a platform for the sale, rental or services of some entrepreneurs to others and have already identified a goal, you will need to learn more about the basic functions.

Basic functions are present in most applications such as Alibaba, Amazon and others:

Registration algorithm;
Having of a registered profile and its status (perhaps even a rating);
Product catalog (product database with a template field);
Cloud storage;
Search by software;
In-app payment (payment gateway);
Checkout (template questionnaires);
Reviews under the product card from buyers.

There are also advanced features that can be installed into the application as needed. Initially they may seem superfluous. But as your business expands, they can become true “magic wands” that facilitate and automate a huge part of your and client's business processes. Examples of these functions are:

Notifications. Remind customers of the platform and tell the most relevant app news - these actions increase the probability of the app earning and stimulate audience interest.
Monitoring of product delivery. Customers have more confidence in the application when they can understand exactly where the ordered and paid goods are located and when they will be with them. Such a system requires well-established logistics and the creation of a system of codes, which is noted at different stages of delivery. The marked code automatically reflects information about the product to the user's account.
Recommendations system. It is formed thanks to AI and collected statistics about the movement of a particular account on the site. This allows you to form recommendations for the product and increase the chance of a deal.
Integration with social networks. Often, people do not want to remember a lot of passwords and create the same type of accounts everywhere. Integration with social networks solves this problem. It allows not only to remove the need for the registration procedure, but also gives more information about the person and his needs.
Recommendations system. It is formed thanks to AI and collected statistics about the movement of a particular account on the site. This allows you to form recommendations for the product and increase the chance of a deal.
Search filters. The better the in-app search is configured, the more chances the customer will find the item they need and make a purchase. Elastic search together with a system of filters by categories will help the user to find what he wants faster. And the introduction of keywords will make the search process even easier.
Live chat. It can be done in two ways: a chat with a support employee and with an AI (Artificial Intelligence). AI is useful when users ask standard questions. When AI answers standardized questions, it takes the workload off humans and allows them to work more closely with the original queries.

This is not a complete list of possible advanced features that can be integrated into your application. However, in order for the launch of the program to be excellent, it is necessary, after setting the goals, ideas, functionality and monetization described by us, to do the following:

Step 1. Describe the idea and all the details in the project documentation

It will be easier for you to make changes and complement the B2B Marketplace idea if you write it down. The developers you contact to create a project will more easily understand its essence and will be able to draw up a more accurate technical plan of the task. This will speed up and facilitate the work on the application. If you have any difficulties, then you can contact us to discuss the project documentation.

Step 2. Select a development team

This stage is very important for the future of your application. A competent team is not only able to complete the project in the required time frame, but also try to improve its quality and all the wishes of the client.

In short, you will need to select the team that meets your needs by country of origin, price and level of competence. This is easy to do if you know the algorithm and logic of interaction with development teams.

Step 3. Control the stages of the project

After discussing all the stages and drawing up a contract, work begins on the creation of software. Your task at this stage is to communicate and monitor the team's activities, which is built from several interaction models:

Project Based Model - All responsibility for technical solutions and web project management rests with the developers. Contains a predefined list of tasks, scope and time frame.
Extended team - responsibility, management and control over the development of a web project lies with the customer. A person responsible from the customer's organization is placed inside the web development team. This responsible person controls and clarifies the current stage of the project. This form allows you to stay within budget when creating large projects.
Mixed team - This type is suitable if you have your own programmers, but want to hire a team from a third party company to create complex web site updates. This interaction saves time and money as the work is done jointly. Responsibility is divided according to the drawn up agreement.

However, control lies not only in communication and model types but also in understanding the mechanics of working on an application.

Step 4. Preparing for an advertising launch

While the project is in development, you should take care of its launch. If you have already decided on the goals of the project and what business problems it solves, the development process will be much easier and faster. But like any application, it needs an audience to work.

To do this, you need to turn to such an economic tool as marketing and answer the following questions:

What does your platform offer attractive for users to start using it? You must put yourself in the shoes of the user of your application and understand why they can come to you, and for what reasons they can go to competitors. All the points that differentiate you from your competitors and the benefits for people working in B2B should be written out. On their basis, an advertising message will be created and it is they that can be used to develop a slogan, logo, positioning, application design, etc.
How to attract users to your platform? The answer to this question is to use a simple algorithm of actions: tell potential customers about your benefits through communication channels. You have already mentioned the benefits in the last paragraph.

Communication channels are a place of concentration of people where you can place your advertisement.

These include social media, ad impressions on other sites, and other opportunities to make yourself known. Since you are developing applications with interaction over the Internet, then advertising should be in this environment. Of course, if TV and radio are still popular in your country, you can use them as well.

However, it is worth understanding who you are attracted to. Most often, the B2B structure is designed to attract small and medium-sized businesses (sometimes freelancing). And they are all on social networks.

Having decided on the content of the advertisement, you can choose its type and frequency of work on the most popular social networks in the world. At the time of 2020, there are many social networks, both global and regional (those that are popular in a particular country or a number of countries). We advise you to use both of these channels to attract both local entrepreneurs in your country and attract global clients.

Top Popular Social Networks 2020 for Business Advertising:

Facebook. A popular global social network that easily integrates with various applications and has more than 2 billion users.
YouTube. Popular video messenger that is viewed by 1.9 billion people every day (based on the number of registered users). A system that allows you to watch YouTube content without registering significantly expands the reach of users who can see your ad.
WhatsApp. This application is popular in 180 countries around the world. It is used for messaging. At the moment, WhatsApp is no longer just a messenger for communicating with family and friends, but also a place for discussing business issues. Companies around the world use WhatsApp to communicate. Contacting a number of businesses to post information about your application is not a bad advertising idea.
Instagram. A social network visited by 1 billion people a day. Thanks to its visual style, it attracts attention and is a place of concentration for users and entrepreneurs that advertise their business through photographs. Running Instagram ads can bring small and medium businesses to your company from all over the world.
QQ is a social network for instant messaging, reminiscent of WhatsApp. But she is especially fond of the countries of the East and is very popular in China. Advertising there can introduce entrepreneurs of the east to your application. The social network of China - Qzone can also be attributed to the same category.
Tumblr. 642 million people arrive on it and share various files with each other in the form of a blog. There, you may come across blogs from aspiring and experienced entrepreneurs who might be interested in your application.
Tik Tok. A popular social network that produces short videos. At first sight, Tik Tok looks like a gathering place for young people to have fun. However, there are 500 million users on Tik Tok, including many small business beginners. They talk about what they do and grow in their business and inspire others in short videos. Advertising for such people can be beneficial in that they can then tell about your application on Tik Tok, which will give self-promotion (in social networks aimed at text, this can also happen, but it is less likely that they will notice).
Twitter. A social network with short texts that has gathered 335 million people over the years. Advertising is well established and has a more capacious look, which helps many entrepreneurs not to get stuck in the development of voluminous commercials and banners.
Reddit. This social network positions itself as “the first page of the Internet”. 330 million users anonymously (or not) share their opinions, ask questions and discuss various topics. It is possible to place your advertisement there, which may be of interest to many entrepreneurs. Business representatives come to Reddit to look for ideas for business (according to US market research, this platform is very often used as an inspiration for starting a business and discussing ideas).

This entire top is aimed at helping you choose the most suitable social network for your ad placement. But the final decision in the marketing company for the application is up to you.

Step 5. Extend the application

B2B Marketplace needs to expand and strengthen its position to be successful. Advertising can attract an audience. However, the following points are capable of developing a high-quality and popular application:

Development of the platform through functionality updates;
Partnerships with companies that are interested in your audience, but they are not direct competitors;
Statements about yourself at various conferences and events;
Create a preferential application policy for a different category of customers.

LET'S DISCUSS YOUR IDEA

Exceed Team is interested in developing entrepreneurship and is ready to take on your B2B Marketplace project. If you still have questions and would like to know more details about developing an application of this kind, write to us.

What are the main types of B2B applcations?

"Business to business" apps include E-commerce platforms like Amazon, service marketplaces like Upwork, and rental marketplaces like Airbnb.

What are the most popular business models for B2B platforms?

Transaction fees
Subscription
Advertising
Additional functions for a fee

What are basic features to build for a B2B app?

The key functionality includes:

Registration
Profiles
Catalog
Product cards
Cloud storage
Search
Payment
Checkout
Reviews