A B2B tool vs. a marketplace for Brands
What is the difference between a B2B tool and a marketplace? As FashionTrade combines both of them, this is a question we have often heard. We want to dedicate today’s blog post to the topic and go through the differences with you. How do they differ and how can they complement each other?
B2B tool: a definition
A B2B tool can be anything that helps you increase your sales in the B2B segment, opposed to selling to end-consumers (b2c). It can be a tool like Linkedin that helps you find more prospects, or a CRM system that lets you organize these prospects better, or an Email Marketing tool that helps you reach out to these contacts and establish a relationship…and so on. Anything that makes creating and realizing wholesale business opportunities easier for you.
We have grouped the different kinds of b2b tools that are out there in one overview focussing on networking tools, on calendar tools, on e-commerce solutions and on after sales services. However, when speaking about a B2B tool, the emphasis is normally placed on the e-commerce character of the tool.
It’s a tool that helps you transact – in that sense a B2B tool can be your own shop.
Just like any b2c business your prospect can go online and buy directly from your brand in your store. Your retailers will get an overview of all your collections and single items, pre-packed or pre-selected boxes to buy a certain style in a few clicks. An easy shopping experience makes your retailer want to come back to reorder and order again once your new collection is out. Your store is a place where your retailers can shop just as if they were end-consumers, filling their baskets with the various items of your collection, editing the physical shipping address and paying upfront through credit card if that is what you prefer.
You are in charge of your b2b tool, it is in your name but also in your hand to make it work. Here the challenge becomes how to attract interested buyers to your store. What marketing channels can you use to bring new customers to your store? Advertisement, working with media and partnerships with other brands – We have covered it all for you in our guide on How to best use your b2b webshop.
A marketplace for brands – Definition
A marketplace is a place for trading just as well, but you only participate and do not manage it. In a nutshell, a marketplace means: In one single space the shopper can find all he or she needs without moving further, compare prices and directly buy at that place. The seller, on the other hand, has the advantage of many shoppers being attracted by the full range of products there and profits from the buyers being attracted by his neighbouring seller.
In online commerce, the idea of a marketplace is very similar. Products by different sellers are on offer and buyers come to discover, evaluate, compare and eventually buy these products. In online commerce, however, the marketplace is not physical and there is a structure organizing the marketing. It’s a third party creating the virtual space, attracting sellers and bringing buyers to the stands (web traffic) so as to generate revenue for the sellers. It’s also the marketplace site that processes the transactions. For this service of exposing the seller to a new customer, of marketing the products and of processing the transactions and payment, marketplace platforms usually charge a small commission or monthly fee based on the volume. The buyers, on the other hand, are rarely charged for the opportunity of doing commerce in the marketplace. There are many different marketplaces like Amazon, Rakuten or eBay always depending on the segment and market you move in.
Each marketplace is different in the way it works, in the region or product segment it operates in, in the segment of users it attracts and in the way it interacts with them and in its policy of letting actors participate (a closed versus an open marketplace). Some marketplaces only enable the transactions but the physical product is sent from seller to buyer independently like the case of eBay whereas others offer the service of drop shipping (like Amazon optionally offers) in which case the seller first sends its merchandise to the marketplace’s warehouse and the buyer then receives the product from the marketplace directly. On top of enabling transactions, a marketplace can include other functionalities like bidding or auctioning (as eBay prominently started out with), advertisement for resellers to highlight their produce, give discounts or directly reach out to buyers.
For your right to participate, showcasing and selling your products, you pay a commission to the marketplace. The marketplace brings you customers and ensures you have the necessary infrastructure for transactions in place like product catalog, order process payment connection and a follow-up process that allow you to fulfil and ship the order and let your customer know.
B2B tool vs. Marketplace – Summary
As we have seen both a b2b tool and a marketplace can be transactional, can be a way for you to sell or purchase something. The big difference lies in ownership. You make a b2b tool your own, you use it as you would be using your offline high-street store, whereas in a marketplace you are only participating. By making it your own, a b2b tool also becomes your own responsibility. In a marketplace, you are merely a participant and by paying a commission you gain access to a pool of purchasers and to an existing infrastructure.
A b2b tool gives you more flexibility but also demand more resources from you to maintain it and acquire customers. Depending on the degree of personalization that a marketplace allows you, you can visually make it your own.
In the end, it really depends on what you need and what you can give to grow your b2b business online.
B2B tool vs. Marketplace – Stronger together
FashionTrade combines both of them. We call it a one-stop marketplace. You can use FashionTrade only for your existing retailers, not opening yourself up to others and as such offering your retailers an easy and secure place to shop online. However, using FashionTrade only as a b2b tool, you are missing out on the best part!
Thanks to our marketplace character, we can support you in growing your business, giving you access to many other retailers in your segment but also granting you access to market insights that will let you make smarter decisions. As with other marketplaces, it can be used in addition to your own shop to expand your customer and market reach.