B2B marketplace development movement is accelerating, with all makes and models of companies building platforms and ecommerce strategies they hope will stick with digital business buyers and sellers.
But the road to success can be a long one. And the journey along the way may be full of twists and turns, and even dead ends.
A prime example of a company dealing with — and overcoming – the challenges of building a lasting B2B marketplace is Bay Supply Co.
Bay Supply makes a strong entrance to the B2B marketplace world
Bay Supply, an industrial distributor based in Farmingdale, New York, has been selling a wide array of fasteners to big and small companies since 1961. In December, it rolled out a new marketplace on BaySupply.com. It brings together buyers and sellers in what the company calls a disparate industry.
In less than a year of operation, Bay Supply’s B2B marketplace has attracted about 50,000 buyers to its inventory of nearly 180,000 fastener products. Its products range from rivets, lock bolts and blind bolts to blind sealing plugs, rivet nuts, helical inserts, and key locking inserts.
“We are onboarding about one or two sellers each week,” says Bay Supply chief operating officer Michael Eichinger.
But even though its marketplace is on track to generate significant first-year gross merchandise volume, Eichinger doesn’t see Bay Supply’s marketplace as truly successful — yet.
“In ecommerce, three years is about the average time so achieve a true return on investment on a major initiative,” he says. “With a marketplace it might be five years to eight years.”
Bay Supply spent two years developing the platform. The marketplace was designed and launched in conjunction with McFadyen Digital, an ecommerce and marketplace consulting firm. It was a new extension of Bay Supply’s Magento ecommerce platform.
But building the platform wasn’t the most difficult challenge, Eichinger says. One big challenge is educating industry buyers and sellers on the premise that the marketplace is a new, fast and easier digital channel to help find and purchase products.
“A marketplace isn’t about just bringing buyers and sellers together,” Eichinger says. “The value-add is making someone’s job easier.”
Ongoing transition to digital
Fastener-industry manufacturers have varying degrees of ecommerce expertise and technology. So, the time and resources needed to connect sellers to the Bay Supply marketplace varies widely.
“Every day is a new challenge,” Eichinger says. “In this industry, there is a lag in technology. Some companies with 1,000 products, we can onboard in a day or two. But for others with 16,000 products, it may take a week or more.”
To attract digital buyers and sellers, Bay Supply is offering free registration to distributors that sell fastening products. It plans to offer digital buyers more than 2,000 types of rivets, bolts, threaded inserts and related tools.
Bay Supply will also work with distributors to add new categories to better position their product offerings, the distributor says. Digital tools available on the marketplace include automated workflows and dashboards that multiple users can access.
B2B marketplaces that serve specific markets and industries will proliferate, Eichinger says. In the long term, what will make any marketplace successful is how well it connects and serves its core market. “In the end, there has to be the network effect,” he says.
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