First, it is important to gain an understanding of what a Marketplace is. Throughout the years, I have viewed them differently from suppliers, but if someone were to ask me for a precise definition, I would struggle to provide one. Even today, I find it challenging to define a Marketplace. They can be seen as an elevated form of distributor, particularly focused on enhancing the digital experience. However, the best brick and mortar distributors now have competitive digital experiences. These same distributes have augmented their product lines with 3P sellers to blur the line with digital marketplaces. I believed they lacked sales teams and operated solely in the digital realm, but evidence has proven me wrong as they employ customer advocates. While there is nothing inherently wrong with this approach, it further blurs the lines when it comes to defining a Marketplace.
A marketplace plays a crucial role in the modern landscape, especially in the omnichannel environment. It allows sellers to reach their buyers through various channels, including physical sales representatives, brick-and-mortar stores, call centers, and websites. Marketplaces offer an additional option for sellers to blend with their existing procurement methods. They have been around for over a decade and will continue to be a significant presence in the foreseeable future. Ignoring the presence of marketplaces can cause suppliers to miss out on valuable opportunities.
Marketplaces provide great value to buyers, particularly in the business-to-business (B2B) space. They allow buyers to access multiple suppliers for a given product, reducing the number of vendor records they need to manage in their financial and ERP systems. Users of marketplaces appreciate the shopping experiences they offer, and some marketplace leaders have set high standards for user experience and shopping satisfaction.
However, suppliers who have positioned themselves as value-added sellers for many years may face challenges in differentiating themselves and avoiding disintermediation in the marketplace world. When goods are sold through marketplaces, they can sometimes be reduced to mere commodities, compared solely based on price. This trend is expanding beyond traditional categories like paper and trinkets to include IT accessories, MRO (maintenance, repair, and operations) products, and even life sciences.
In this series I will share thoughts on how to differentiate in the marketplace world based on factors such as logistics, product information, pricing, quoting, omnichannel, etc. Please stay tuned for additional blogs:
