B2B Marketplace: how to increase your profit?

The B2B marketplace model has experienced a significant boom due to the Covid-19 pandemic. Many companies have taken a one-way path to digitalization to continue their business, especially for purchasing departments. In fact, according to a study by PYMNTS in collaboration with American Express, 80% of B2B buyer-supplier transactions could be conducted electronically by 2025. Why such success? B2B marketplaces are practical for developing market share, positioning, and differentiating a company. By creating such platforms, companies can extend their business, internationalize their activity, expand their catalog and optimize their purchasing and inventory management processes. However, a new issue seems to be emerging within the ecosystem: how to increase the profitability of a B2B marketplace? In this article, discover 7 levers to activate to achieve this!  

1. Expand your product catalog

Suppose the product catalog extension on a B2B marketplace can help increase profit by retaining and acquiring customers fond of novelty. In that case, it especially allows the marketplace to become a reference player and position itself as a verticalized expert. Unlike B2C, which is transactional, the B2B marketplace must convince several levels of decision-makers. And that's precisely why outsourcing is the way to go in B2B! Larger choice and higher quality for professionals who buy in bulk (and are particularly selective) directly impacts the profit of the company they represent and, therefore, their loyalty to the platform. The extension of the product catalog allows the B2B marketplace to position itself as a "one-stop-shop" solution to meet more needs of the same customer. Professional buyers are more loyal, and their average shopping cart increases. The extension of the catalog thus contributes to increasing the profit of the marketplace itself.  

2. Offer a B2C-like user experience on its B2B marketplace

Corporate customers are well-informed Internet users, accustomed to making purchases or researching online on a personal basis. They logically expect to find on a marketplace -or a B2B website- a navigation experience as fluid and qualitative as on Amazon or Airbnb, for example. Therefore, any B2B marketplace operator must quickly think or rethink the user experience by adopting the codes of B2C e-commerce. The keywords are simplicity, fluidity, and efficiency from the connection to the platform to the final payment and delivery. The B2B marketplace must therefore offer its professional buyers the same quality of service as B2C. However, there are significant differences between these two purchasing dynamics:

• B2B purchases are for larger volumes and medium-sized baskets (bulk purchases);
• B2C is transactional and based on affect, while B2B is based on personalized support;
• Sales cycles are longer in B2B;
• As customization is even more essential in B2B than in B2C, professional buyers expect adapted payment methods.

This type of platform needs to offer the following:

• An optimized platform (responsive interface and fast loading time);
• A wide choice of expert suppliers for a controlled value chain;
• A climate of trust, especially around the payment experience;
• A purchasing process reduced to a maximum of three or four steps by eliminating, for example, obstacles to purchasing such as the re-entry of information already communicated;
• Risk management expertise;
• An optimal reporting system to measure performance;
• A profitable operating model that offers operational excellence (REP / SAP).

And all this, to obtain :

• Recurrence among buyers;
• A service offer adapted to the needs of the B2B sector for better retention.

3. Focus on client relationships

Even though 66% of B2B buyers prefer to have human interactions at a distance, the all-digital approach sometimes shows its limits. To increase the profitability of your B2B marketplace, you have to eliminate the illusion that everything can be digitalized. According to a 2023 study by Commercetools, B2B buyers want a hybrid sales approach that mixes in-person interactions with digital self-service, depending on the stage of the sales process:

• One-to-one sales are ideal for establishing a relationship, meeting the needs of high-value-added customers, and carrying out complex sales that require support (industrial sectors, construction, etc.);
• Self-service is best suited to the needs of existing customers for finding and searching for products and replenishment, as well as for lower transactional value and less complex sales.

4. Make product discovery a priority

Another trend straight from B2C. On an e-commerce site, the consumer wants to find his product quickly and get as much information as possible: technical characteristics, customization options, and compatibility with other products or services... One challenge for a B2B marketplace that wants to increase revenue and profits is making product discovery easier, even fun. Most marketplaces typically have vast product catalogs that support thousands of product variations and customizations. Therefore, finding the right product can be complex, resulting in missed opportunities and lost revenue. But solutions do exist. For example, the B2B marketplace Normet (construction and mining) decided to streamline its 65,000-product catalog by digitizing each reference and linking it to related high-value products to increase the size of the average basket and create new uses. Some marketplaces also offer online configuration tools that help determine whether the customer's desired components are compatible and available quickly: with crucial information such as expected delivery time, pricing information, and lifecycle cost, B2B marketplaces can make themselves indispensable and create more repeat business.  

5. Successfully manage of your internationalization

Selling in several countries is one of the essential growth levers for a B2B marketplace. Internationalization allows the marketplace to gain new market shares and to position itself as an international expert in its field, which increases its profitability and notoriety. However, this step should not be taken lightly. Part of the difficulty is that it is not enough to clone your site in Italian, Czech, or Spanish for it to work. Here are a few precautions to take to ensure the internationalization of your B2B marketplace:

• When your B2B marketplace sells in multiple countries, it's essential to ensure the buyer has an interface in one language and, if possible, in their native language. For example, you can require sellers to describe their catalogs in multiple languages if they want to sell their projects in numerous countries.
• To quickly penetrate a new market and establish the legitimacy of your B2B marketplace, list local sellers and locally known brands. This will allow you to meet the buyers' specific needs in the region you are setting up and stick to their buying habits.
• It is also important that the buyer has an interface that offers a wide range of payment methods specific to national and local customs.
• This is where the PSP - like Lemonway - plays a very important role: it provides you with all the payment methods for each market in which you want to develop your business.
• You must also have an interface that allows you to buy in several currencies. This interface must show all prices, excluding taxes, of course. This is an undeniable point, but the buyer must also have an exact and transparent idea of the actual price he will pay at the end, whatever the nationality of the seller.

6. Offer adapted and up-to-date payment methods

Transactions on a B2B marketplace, especially when the activity is international, present marked specificities compared to B2C platforms. The value of the average basket is much higher: prices evolve according to the volumes ordered, some buyers have negotiated rates, and payment terms differ according to suppliers. It is, therefore, crucial for operators to be able to take full advantage of this very complex specification to provide all the payment options and functionalities adapted to the expectations and payment habits of business customers, such as :

• The transfer facilitated by virtual IBANs, and Open Banking allows for easier reconciliation;
• Pay by Link allows you to pay online by clicking on a link sent by the seller;
• Request-to-Pay allows you to request payment from a third party;
• The BNPL (Buy Now, Pay Later) allows you to pay in several installments without charge;
• The electronic SDD mandate allows you to withdraw money from the customer's bank account;
• The billing mandate allows you to pay an invoice at a later date;
• The purchase validation workflow allows you to validate purchases according to a predefined process;
• Dynamic pricing allows you to adjust prices based on order volumes automatically.

7. Choosing the right payment service provider (PSP)

The choice of a payment service provider (PSP) should not be taken lightly. Indeed, the growth of your B2B marketplace depends on it. The chosen PSP must be able to anticipate the particularities of B2B platforms, propose or develop functionalities accordingly and know how to evolve in line with the B2B marketplace ecosystem. It must also support you in KYB procedures by validating seller profiles to comply with the imposed legal framework (LCB-FT / DSP2). Lemonway's solution is flexible, powerful, and scalable, perfectly adapted to B2B marketplaces launching internationally, thanks to the KYB process. It is easy to set up (a connector is all needed for the API to be compatible with the client company's CMS, for example). With the support of Lemonway's teams, your company will have the best technological assets and the most experienced experts to help your B2B marketplace grow! So contact us!