Over the past few years, ecommerce B2B marketplace development has gained increased attention from both distributors and buyers. As the B2C segment has shown, the platform-based model generates network effects, resulting in more diverse choices for customers and a significant increase in sales volume. At the same time, B2B marketplaces simplify financial transactions and help to cut down on paperwork for both parties involved, resulting in more streamlined operations. All of these benefits make building a marketplace for a B2B segment an appealing and rewarding endeavor.
If you plan to upgrade from a ready-made solution to a custom B2B marketplace platform or expand an existing platform’s capabilities, this article is for you. We will explore all of the key aspects of custom development for ecommerce, including trends, common challenges, must-have features, and estimation process insights.
B2B marketplace: benefits for business
As of 2023, the B2B market continues to grow rapidly, fueled by technological advancements and increased globalization. As more companies embrace remote work, virtual events, and digital marketing, the demand for B2B ecommerce marketplace development has seen significant growth. According to recent statistics, the global B2B ecommerce market is expected to reach $33.3 billion by 2030, with an annual growth rate of over 20.2%.
Ecommerce marketplaces for B2B offer multiple benefits.
- They enable businesses to access a global network of suppliers and customers, thereby reducing the time and costs associated with traditional procurement processes.
- Moreover, B2B marketplaces offer companies a range of value-added services, such as real-time payment solutions, data analytics, logistics, and fulfillment, which help with optimizing their operations, reducing transaction costs, and improving overall efficiency.
- Furthermore, B2B marketplaces foster greater transparency by enabling businesses to make informed decisions and build long-term partnerships.
Opportunities for ecommerce B2B companies
So how does employing a marketplace can help an ecommerce B2B business in its growth and development?
Extend distribution channel. An ecommerce marketplace can also be a way for companies to add a new distribution option for suppliers. Or, a producer with a fragmented distributor network and a strong brand can integrate its distributors onto a platform for them to sell their products. In this scenario, the firm that creates the marketplace adds a new sales channel to its distributors and, in return, benefits from closer access to end customers and a better overview of product inventory.
Introduce new ways of engaging B2B customers. Tailored CRM software, the use of AI chatbots, and other solutions introduced via a marketplace help buyers in understanding products and assist them in making better and faster purchase decisions.
Bring together fragmented markets. Compared to a well-established market, a fragmented market is characterized by a dispersed and diverse user base with specific and often niche needs. B2B marketplaces allow companies to get a deeper understanding of user needs, build trust and credibility, balance supply and demand, and provide a seamless user experience.
Creating a B2B marketplace can become a key driver of growth and development for a company, supplying it with a range of benefits that enables optimized operations and boosts overall efficiency. For example, a digital marketplace for a car service company built by Surf provided a convenient way to book and manage services online for both B2C customers (individual car owners) and B2B customers (legal entities with motor pools and service centers).
Surf collaborated with the company to design and develop a platform with features like search, booking, scheduling, payments, and reviews, and employed modern web technologies like React, Node.js, and MongoDB. By launching the online marketplace, the client was able to improve customer experience, increase revenue, reduce operational costs, and be more prepared for future expansion and scaling of the business.
Ecommerce marketplace development challenges
While the emergence of B2B marketplaces has helped numerous businesses to increase efficiency, save costs, and expand market reach, many of them fail to gain traction over time. Let’s take a look at the common challenges encountered by B2B marketplaces, which, if failed to be properly tacked, can lead to their closure.
Marketing and finding the first users
Identifying the target audience prior to a marketplace launch is an essential step since it defines the key vectors of business activity. Start by analyzing the profiles of your customers, both companies and personalities responsible for purchase decisions. Are they directors or C-level managers? Make a list of pain points that potential customers face and decide how to address them with your B2B marketplace. Also, thoroughly analyze from 3 to 5 of the most prominent competitors in your niche and how they engage with their audience. Understanding your target audience and its needs can dramatically improve an emerging platform’s chances of success.
Knowing the importance of understanding your target audience and delivering an excellent user experience, Surf provides a Customer Journey Map research service. This research takes place prior to commencing the development itself. During 5 days, a team of seasoned experts works closely with the client’s team to analyze user needs, determine what features to include and their priority, as well as identify any issues in the existing solution. As a result, the client receives an insightful user journey map and a detailed table of the project’s features.
Working out a complex B2B buying process
In contrast to B2C, the B2B sphere involves numerous elaborate operational processes when it comes to making a purchase. Such complexity sets the market entrance threshold for B2B solutions quite high, especially when combined with the demand for a diverse variety of payment options. Making the complexity of transactions invisible requires advanced architectural solutions, clever user experience logic, and high-level programming skills. When done right, seamless payment processing can significantly increase the user base of an ecommerce marketplace.
Curating supply and matching it with demand
As marketplaces strive to provide a diverse range of suppliers while assuring their dependability, balancing quantity and quality is critical. The varied range of products, services, and providers available in B2B ecommerce makes achieving an optimal balance between supply and demand a challenging task. Industry-specific criteria such as regulatory compliance and technological specifications complicate the process even further. Here, efficient resource allocation plays an important role, as markets seek to connect suppliers with suitable customers to maximize resource utilization. A properly matched supply and demand boosts B2B marketplace value in the eyes of the clients, opening a path to bigger amounts and a higher frequency of transactions.
Adding value with SaaS
One of the promising approaches to the B2B marketplace business model is incorporating SaaS capabilities. This enables seamless integration of software tools within the marketplace platform, eliminating the need for separate installations, as well as high customization and scalability. The subscription-based model lowers costs, while continuous updates and support ensure businesses have access to the latest ecommerce features and assistance.
Examples of such B2B platforms with SaaS offerings include Notch, a website and a mobile app that simplify the supply chain and ordering for restaurants by proving tools for inventory and order management, and ResQ, a web portal and a mobile app for restaurants that make requesting maintenance and repairs easier, while also supplying solutions for asset management, repair invoicing, and monitoring business metrics.
Marketing and trust-building
Marketing activity plays an essential role in the success of B2B marketplaces as it helps to generate awareness and visibility among businesses, establish credibility, attract buyers and sellers, as well as showcase the platform’s unique features and benefits. Weak marketing efforts and promotion strategy can lead to a marketplace’s failure to attract a critical mass of participants required for long-term growth.
Business customers often rely on a well-known website to buy supplies and find partners, which can make it difficult for a new marketplace to establish relations with companies. While usually associated with the B2C segment, it can be a good move to employ social media to build social trust in the B2B sector of ecommerce too. Showcasing positive customer experiences and leveraging influencer or celebrity endorsements are all working tactics to build trust and gain the confidence of potential buyers.
AI technologies can be of great help as well. For instance, we at Surf provide custom solutions based on the OpenAI model that employ ChatGPT for automating marketing activities and personalizing customer communication. In a highly competitive niche, teaming up with AI can be a game-changer for the marketplace’s promotional efforts.
How to build a custom ecommerce marketplace
So why should a B2B business even consider building a custom ecommerce marketplace instead of using a ready-made one?
First, out-of-box solutions can have features that your organization does not need and lack the ones critical for your business. Additionally, the initial attractive price of ready-made platforms can dramatically increase over time if it is a pay-per-user model and the organization expands significantly. Furthermore, with an out-of-box solution, a company has limited abilities of branding, while the aspects of security and availability of any features are completely out of the user’s control. So, if you decide to go down the route of marketplace development for B2B, there are two main options that require different amounts of resources and provide various levels of customization.
- Build and launch with no-code software. It is possible to create applications using no-code software development platforms instead of traditional coding. These platforms include a graphical user interface as well as pre-built components that may be integrated. If you have low technical experience or development resources, this solution might be a good fit. Thanks to large libraries of templates, workflows, and integrations, no-code platforms allow for a speedier development process. However, customization possibilities are limited, which can constrain the platform’s scalability.
- Developing from scratch. This approach gives you full control over the software’s architecture, features, and user experience. It offers the flexibility to tailor the platform precisely to the company’s needs and allows for the creation of a unique user experience, potentially providing a competitive advantage in the market. However, it is the most time-consuming and resource-intensive option that involves designing, developing, testing, and maintaining the entire software stack. You will need a proficient development team or external partners to execute this option successfully.
Requirements for success: 5 things to remember
There is a big chance that your ecommerce marketplace is not the only solution in a particular niche or industry. Thus it is important to invest in making it stand out among competitors, especially in the following areas.
Create a unique look and feel
A unique look and feel are crucial for B2B marketplaces as they can leave a lasting impression of quality, reliability, and credibility, which are essential factors for businesses when choosing an ecommerce marketplace partner. Additionally, appealing UI positively impacts user engagement, brand recognition, and customer trust.
B2B solutions tend to be rich in functionality and complex, so the importance of convenient UI/UX can hardly be overestimated. A well-designed and visually appealing interface makes it easier for users to navigate the marketplace, search for products or services, and conduct transactions.
When designing a B2C mobile app for a car service marketplace, a bright and stand-out brand identity created by a topline design studio served as Surf’s point of reference. For the B2B solution, our design team suggested a more classic and soft choice of colors, since being exposed to a bright interface for a long period could put a strain on the eyes of corporate clients. The final design respects the original brand’s identity and remains functional at the same time.
Build custom features and integrate third-party apps
To stand out amidst the surge of ecommerce marketplaces, incorporating custom features is a valid tactic. Custom features enable a platform to tailor its functionality to the unique requirements of the industry and target audience, providing a personalized and efficient experience. Additionally, integrating third-party apps extends the marketplace’s capabilities without the need for developing these features from scratch. Usually, such functionality as payment gateways, shipment tracking, and analytics can all be implemented by using ready-made, robust solutions.
The utilization of mobile devices is steadily increasing worldwide. Research by CNBC predicts that by 2025, 72.6% of internet users will access the web exclusively through their smartphones. B2B eсommerce is no exception to this tendency with studies showing that over half of B2B procurement is conducted from mobile devices. There are three main ways of developing a mobile marketplace app.
- Creating a native mobile app for an ecommerce marketplace provides the ultimate user experience, utilizing the device’s components and platform’s capabilities to the highest degree. However, this option can be expensive and require a significant amount of time to refine apps for several platforms.
- The third option of cross-platform development offers great balance: it allows one to achieve a nearly native experience while saving on resources since Android and iOS apps are built from a single codebase. For example, Surf was able to save about 40% of the project’s budget by choosing Flutter cross-platform framework to create 6 mobile apps for a pharmacy chain that included 3 brands.
Supporting transactions through each step
Smooth and convenient payment processing is fundamental for any ecommerce marketplace and is particularly important for B2B, where a purchase can involve employees from several departments. The transaction process should encompass all the possible interactions between buyers and sellers, including pre-booking steps or the initiation of a Request for Proposal (RFP) and negotiation, the requirement for verification, certifications, contracts, and the specifics of payment execution. It is also crucial to ensure compliance with regulatory guidelines for online payments and data protection that are relevant to a state or a country where the marketplace operates.
Having worked with multiple fintech companies to develop apps for banks and trading platforms, Surf has extensive expertise in solving fintech challenges. Our team has created intuitive and secure solutions that enable both individual and corporate customers to conveniently access their accounts and conduct operations as well as ensure the protection of sensitive financial data. With a comprehensive understanding of payment gateways, digital wallets, blockchain technology, and financial APIs, Surf offers end-to-end solutions tailored to the specific needs of each client.
Employ the latest technology trends
Recent developments in AI and how the technology has become more accessible hold tremendous potential for B2B ecommerce marketplace development. AI solutions can collect and analyze marketing and sales data using machine learning and predictive analytics, resulting in high-quality leads and actionable insights based on purchasing trends. Also, the rapidly evolving chatbot technologies, with ChatGPT as the brightest example, open up new possibilities for streamlining customer communication and providing real-time support.
Surf services include the integration of custom plugins based on ChatGPT into an ecommerce marketplace resulting in enhanced efficiency of customer interactions and overall workflow. By utilizing ChatGPT, we can develop intelligent chatbots or virtual assistants that handle customer inquiries, provide personalized recommendations, and assist both sellers and buyers.
Furthermore, by utilizing OpenAI technologies, Surf can improve the search efficiency of a platform. This enhancement, powered by natural language processing and machine learning algorithms, enables users to find information more efficiently. Such integrations of AI technologies can significantly enhance user engagement, customer support, and overall user satisfaction with the platform.
Average time and cost estimates
When considering the development of an ecommerce marketplace, there are several major factors that determine the overall cost and time requirements.
Development approach. As described in the section above, while using a ready-made solution is a less expensive solution, building a custom platform offers greater flexibility and scalability for future growth but comes at a higher cost.
The number of features and their complexity have a great influence on the development price. For instance, if you plan to include only a standard set of features like user authentication, product catalog management, order processing, and payment integration, the price will be lower than if you decide to add messaging, extensive analytics, third-party integrations, and so on.
Another highly influential factor that determines the price of development is a chosen technological stack. Techstack impacts development costs through factors such as the availability of skilled developers, development timeframe, maintenance and support, licensing and infrastructure costs, integration, and compatibility requirements.
Finally, a project’s price is highly influenced by the location of the development team. For instance, partnering with a development agency in Eastern Europe, where hourly rates are lower by 30-50% compared to the US, can result in reduced expenses without a compromise on quality or difficulties in communication due to work ethics and cultural differences.
For assessing the cost of producing a marketplace platform, one of two methods is usually employed. A fixed priced model means specifying the application’s total cost beforehand, which provides budget certainty but limited flexibility if any requirements change during development. Any modifications after the development starts require additional agreements, which may hinder the overall process.
At Surf, we favor a time and material approach that splits development into stages, each of them delivering tangible results. The customer pays only for the work done during each stage, and a development company gets the flexibility required for ensuring that the project is completely aligned with market and business needs upon completion.