Customers don’t want the inconvenience of hopping from site to site to find what they need. Most B2B buyers would prefer to source from a single channel or platform when given the opportunity.
Distributors must adjust their ecommerce strategy to maintain relevance.
There are five phases in the progression toward building a marketplace:
- Phase One: Only offering your own SKUs and services.
- Phase Two: Working with suppliers and manufacturers to incorporate drop-shipping options into your website alongside your own products. By taking advantage of drop-ship capabilities, you can expand the number of SKUs you offer without having to invest in more inventory.
- Phase Three: Cultivating a working relationship with complementary distributors to host their items on your site alongside your own. For instance, if you are an HVAC distributor, you could work with an electrical or plumbing distributor to create a more robust product offering. While there may be some overlap, expanding your product assortment via partnerships is an excellent way to differentiate yourself and provide more value to customers.
- Phase Four: Opening your site for third-party sellers to list their products alongside yours. This is a hybrid model, similar to Amazon Business. With this model, you run the website, but other distributors or manufacturers use your platform to sell their products, too (for a fee or cut of the profits).
- Phase Five: Developing a purely digital marketplace to connect customers and third-party sellers. With this model, you would not own or manage any inventory – you would purely act as the middleman between parties. Zoro is an excellent example of a third-party-only seller.
Not all distributors will (or should) reach phase five. But few should stay in phase one – the market strongly favors extremely broad assortments and sticking to your own products is a big disadvantage.
Although you may never get to the point where your website acts as a platform for third-party sellers, it is dangerous to assume that you can get away with only offering your own product assortment for much longer. Customers want simplicity and convenience; if you don’t meet customer expectations, they are likely to find someone else who will.
For the full story on building a marketplace strategy, download our report today: Marketplace Strategy for Distributors.