E-commerce is no longer a new concept. Consumers have been buying goods online for years, and since the pandemic, online sales have been rising faster than in-store sales. According to the U.S. Department of Commerce, total retail sales saw a 6.9 percent increase in Q4 2020, and e-commerce sales rose 32.1 percent in the same period. Today, e-commerce sales make up about 14 percent of overall retail sales.
The growth in online shopping doesn’t just apply to B2C consumers either—B2B professionals in all kinds of different industries (including manufacturing) are looking to make purchases online as well. In fact, 80 percent of B2B buyers report wanting the same online buying experience for their business as they already have for personal goods.
In 2019, B2B e-commerce sales for manufacturers grew by 21 percent to $430 billion, which is 20 times faster than total manufacturing sales. Seventy percent of B2B decision makers say they are willing to make purchases of $50,000 or more online, and 27 percent say they would spend $500,000. Unfortunately, 80 percent of manufacturers still rely primarily on internal sales teams and distributors, and 70 percent don’t have a digital sales strategy.
Most manufacturers rely on their own website to promote their brand without participating in aggregated online catalogs or sourcing platforms. Although manufacturers may know they need to embrace a new way of selling, many don’t have the skills or resources to implement a digital transformation strategy.
Ready for the good news? The onus doesn’t have to be completely on the manufacturer to meet B2B buyers online. Instead, they can take advantage of a buy-now marketplace, also referred to as a B2B vertical marketplace.
This article covers the ins and outs of B2B vertical marketplaces and why manufacturers should care about them.
What Is a “Buy-Now” Marketplace?
A buy-now marketplace is not a new concept. Etsy, eBay, Amazon, Facebook, Google, and other online marketplaces give consumers direct access to goods from vendors all over the world. It’s a great way for independent merchants to reach more customers online.
The buy-now marketplace concept is similar but gives buyers and sellers a means to connect online in an industry-specific web mart. Vertical marketplaces are having an impact on B2B sales, giving manufacturers new digital channels to reach their customers.
Why Manufacturers Should Leverage B2B Vertical Marketplaces
Many B2B companies maintain online catalogs and offer goods directly to customers. Most manufacturers aren’t set up to sell goods online, and they have been slow to embrace e-commerce for various reasons.
Concerns About Channel Conflict
First, there is the distribution channel. Manufacturers have had their own network of distributors for years. They rely on distributors to sell their wares to sourcing professionals, including handling order processing, shipping, and so on. Distributors may maintain their own online catalogs, but manufacturers argue that selling direct would undercut their distributors and resellers.
Manufacturers also argue that online selling isn’t their core business. Maintaining an online catalog to handle direct sales requires additional web developers, search engine optimization, order fulfillment, and other resources that manufacturers would have to build from scratch.
Stop-Gap E-Commerce Solutions and the Dilemma of Direct Sales
Some manufacturers are starting to develop e-commerce sites to handle direct sales in case the competition drops prices to sell direct and dismantle their authorized distributor network. Others are selling their goods directly but handling fulfillment through their distributors, so as not to compete with their channel.
Forward-thinking manufacturers recognize that their customers are buying more goods online. To compete, they are participating in vertical industry marketplaces, promoting their goods, and building brand awareness where their customers are seeking out products.
The problem with a vendor creating their own direct sales website is they don’t have the market reach. Too often, digital branding is limited to online marketing campaigns and fragmented exposure by distributors. Existing customers and those seeking specific products may choose to buy direct, but most buyers will do comparison shopping to find what they need.
The Distributor Advantage
If you are going to compete online, you need to go where the buyers are shopping.
Distributors have a clear marketplace advantage. They already have access to customers, and they can provide unbiased access to multiple brands. Promoting brand identity in a forum where sourcing professionals look for products—such as a distributor website—is a better way to compete and attract new customers who may not be aware of your brand or specific products.
Even current customers seeking to save time will use a B2B vertical marketplace for sourcing rather than scouring the web. A vertical marketplace makes it easier to source current products, review buying options, and even promote brand loyalty.
Bay Supply Is Changing Ecommerce for Fastener Brands
Bay Supply has been a trusted source for fastener products and equipment for decades. Now Bay Supply is changing the way manufacturers reach customers with the launch of a new buy-now marketplace for fastening product manufacturers, called The Bay Supply Fastener Source and Supply Network.
Bay Supply is already reaching 40,000 sourcing professionals every month. The Bay Supply Fastener Source and Supply Network gives manufacturers direct access to buyers. Sourcing professionals can browse Bay Supply’s online catalog by product type or brand. It has been designed specifically to support fastener manufacturers with their digital transformation strategy, providing a marketplace that exclusively caters to the fastening industry.
The Bay Supply Fastener Source and Supply Network Advantage
Participation in the Bay Supply Fastener Source and Supply Network is free to manufacturers. Participating companies can upload product information and bulk catalogs, with or without inventory, so they are discoverable by sourcing professionals.
There are innovative e-commerce features built into the Bay Supply Fastener Source and Supply Network, specifically designed for fastener companies:
- The Network maintains brand profiles to promote brand consistency and improve search and discoverability.
- The Network allows you to assign authorized distributors and territories for fulfillment.
- As a member of the Network, vendors have access to a dashboard to monitor requests for quote (RFQs) for each assigned distributor.
- Vendors can upload complete product catalogs and supporting digital assets.
- Companies also can upload inventory and pricing for the Network.
- The Network also makes it easier to manage retail and wholesale pricing.
A B2B vertical marketplace provides a simple means for manufacturers to preserve current revenue while expanding their sales through e-commerce. Where many manufacturers have tried to launch their own e-commerce strategies and failed, vertical industry marketplaces such as the Bay Supply Fastener Source and Supply Network give vendors access to sourcing professionals where they look for products and are ready to buy. Vertical marketplaces also simplify the buying experience for customers while mitigating concerns about channel conflict and resolving operational challenges.
With a B2B vertical marketplace, everyone wins. To learn more about the Bay Supply Fastener Source and Supply Network, contact Bay Supply.