A few years ago, some daring venture capitalists embarked on a mission to come up with an idea around a marketplace that was focused on gathering information and would advocate for openness in business sectors that had previously been impenetrable. The idea that was developed was the result of several small business-oriented minds creating top products for business but being hampered by market reach which at that time depended on having the right connections or even word of mouth.
The introduction of B2B marketplaces spelled the end of this way of doing business allowing smaller players to enter the market and sell their ideas. Today, there are numerous B2B marketplaces, many of which are doing extremely well, and some have even been listed on the stock market. In fact, it is estimated that by 2024, B2B marketplaces will be doing about $3.6 trillion in sales, signifying their rapid growth.
One of the marketplaces that B2B companies are increasingly focusing on is vertical B2B marketplaces. In this post, we look at what vertical B2B marketplaces are, how they work and what has made them successful. Let us get started.
What are vertical B2B marketplaces?
B2B marketplaces have been designed in a manner such that they offer a wide range of products and services, making the buying process simple. When vendors choose to sell their products in B2B marketplaces, they can reach out to more customers and sell more products as opposed to when they operate independently.
There are horizontal B2B marketplaces that usually focus on a huge selection of products from numerous categories and vertical marketplaces whose main focus is offering similar products and services from various vendors. Vertical B2B marketplaces are becoming increasingly popular although there are not too many. You can try out the Vertical B2B Marketplaces from Virto Commerce and see how they operate.
How Vertical marketplaces are different from other marketplaces
Below are some of the distinguishing elements of vertical marketplaces:
Vertical B2B marketplaces utilize the fee per sample model where manufacturers pay for a sample fee whenever their products have been shipped out. The use of this model brings together those buyers and sellers who like sampling supplies from a manufacturer—especially when trying them for the first time before they purchase in bulk. If the buyer is satisfied with the sample they received, they can proceed to commit themselves to doing business with the manufacturer. Sectors where sampling has proven to be successful include packaging, design materials, and chemicals.
For any business entity, data can be a serious game-changer when utilized well. Information gathered can help you identify specific areas that require improvement. If you as a vendor can gain access to data analytics from the marketplace you operate on, you can understand how your products are performing. Some companies have embarked on collecting import and export data from B2B marketplaces and are offering subscription services to vendors concerning the data.
The scope of vertical B2B marketplaces has expanded from just allowing for the buying and selling of goods and services in bulk to offering financial services. Some marketplaces have embedded financial information into their page creating a financing program where buyers and sellers can find crucial financial services such as lending and payroll management.