For the last several years, we’ve heard a lot about the potential of B2B marketplaces, especially from investors. Much like their B2C counterparts, they were a hot topic, but the constant buzz went cold. As the B2B ecommerce market has experienced rapid growth in sales, one could wonder why we aren’t hearing more about the explosive success of these platforms.
The “perceived” lack of global-scale adoption in B2B is an indication of the ingrained, often-overlooked complexity of business-to-business commerce. A manufacturer procuring specialized components for a production line is a far more complex setup than a consumer buying a new gadget. Building a digital ecosystem to navigate this complexity is a harder, slower grind, but it will be a profoundly rewarding endeavor. The challenges are complicated, but they are precisely what makes the opportunity so monumental.
While B2C exploded first, the transformative impact of B2B marketplaces is enormous. The B2B ecommerce market was valued at $20.4 trillion in 2024, over five times the size of the B2C ecommerce market. Yet, B2B marketplaces captured only 14.4% of all B2B ecommerce, a small fraction of the 67% share B2C marketplaces took of all global e-commerce in 2021. This vast untapped potential is why the opportunity is so large.
The Enduring Allure and the Inherent Challenges
From working with marketplace founders to building my own, I’ve learned the main attraction of the marketplace model lies in its platform nature. Platforms produce better margins at scale, are asset-light, and build a defensible network of users. They don’t own the means of production; they own the means of connection. This allows them to dominate markets and create immense value. Businesses today expect the same seamless features as B2C platforms—like single-click ordering and next-day delivery options—at their fingertips.
However, building a successful marketplace in the B2B space comes with hurdles that explain why the initial hype has evolved into a more measured, strategic build-out.
- The “Winner-Take-All” Dynamic: As platform experts like Applico have stated, marketplaces often create a “winner-take-all” dynamic. The potential rewards are high stakes, so many marketplaces simply won’t last, due to competition. We often don’t hear about the many marketplaces that failed to gain media attention.
- Industry-Specific Adaptation: Different industries adapt to marketplaces at different paces. For example, when building a marketplace for the Bearing and Power Transmission industry, it was crucial for us at BearingBank to deeply understand how quickly that specific niche will adapt. This adaptation curve is not one-size-fits-all and requires tailored strategies, features, and tools that are industry-specific. This takes time, especially in MRO.
- The Role of AI and Automation: The future of B2B marketplaces will be defined in part by their ability to leverage AI and automation. But even AI has a way to go. AI will help with everything from finding specific products to unlocking new levels of efficiency.
- The Integration of Embedded Finance: B2C marketplaces have simple payment systems; B2B transactions are far more complex. The next big step for B2B platforms is embedded finance. By offering native financial tools like instant credit checks, automated invoices, and flexible payment options, marketplaces become an essential part of a company’s operations, creating a “sticky” platform that is difficult for businesses to leave.
- The Power of the Network Effect: The initial mojo around a single, massive B2B marketplace has faded in favor of specialized platforms. The impact will be driven by the network effect within these niche markets. As a vertical marketplace reaches a critical mass of buyers and sellers, its value increases exponentially for every new user. This creates a powerful, defensible moat, allowing the platform to set new standards for efficiency and fundamentally reshape an entire industry. This initial moat takes a bit to develop and establish, but the real moat—the network—takes years.
Unique Hurdles: Why B2B’s Impact Is Delayed, But Deeper
Building a successful B2B marketplace is not straightforward. The challenges are distinct to the B2B world, and the stakes are high, which explains why their full potential is still unfolding.
One of the primary hurdles is defining the initial vision for the marketplace. A digital ecosystem’s reputation, once established, is incredibly difficult to pivot. This is why the idea of a single, horizontal “Amazon for B2B” often falls short. A generalist hub simply cannot address the specialized challenges inherent in diverse vertical markets. The true winners will be those who commit to a specific industry and nail that initial vision. I have seen this firsthand with founders that succumb to the “shiny object syndrome”.
Another critical factor is the relentless need for continuous innovation. As leading tech frameworks like the High Growth Handbook emphasize, every digital product eventually faces obsolescence. For B2B digital platforms, this means constantly moving beyond simply connecting buyers and sellers. They must integrate solutions for complex workflows, diverse payment terms, intricate logistics, and advanced data analytics unique to their vertical. This kind of deep, integrated problem-solving is what differentiates a truly impactful B2B marketplace from a simple online catalog, what I call “bulletin boards”. It’s about building a moat of proprietary data and functionality that is incredibly difficult for others to replicate.
The Disintermediation Threat and the Unavoidable Opportunity
Industrial distributors are constantly concerned about the growing threat of disintermediation. The linear model is being squeezed from both sides. Manufacturers are exploring direct-to-consumer (D2C) channels, while tech giants and new digital entrants are leveraging their scale and advanced logistics to capture market share. Many believe B2B marketplaces are replacing the middleman, but this is not the case. I have found the key to a successful strategy is to empower the middleman, not replace them. This is achieved by building tools that help distributors operate more efficiently, which gives them a stronger voice in any industry and in turn fosters trust.
Several other factors hinder B2B growth including challenges with technology and system integration, a lack of differentiation, concerns around data and cybersecurity, issues with liquidity, rules, regulations, and more.
The shift is in motion. The B2B market is ripe for specialized marketplace disruption. The businesses that thrive will recognize they are operating in a product-cycle business within a technology-first world. They won’t just move products; they’ll enhance the means of connection—the essential digital infrastructure that empowers an entire ecosystem of buyers and sellers.
While the initial hype cycle around B2B marketplaces may have peaked, their real impact has yet to be realized. For incumbents with the foresight to recognize this inevitable shift and the resolve to invest in building truly innovative, specialized digital ecosystems, the future is promising and poised to unlock unprecedented value for decades to come.
After all, B2B marketplaces are still the fastest-growing digital sales channel in B2B.
The real impact will be seen soon once the complex build-out phases that tech startups are solving have materialized.
Brandon Kelley is an entrepreneur and the founder of BearingBank.com, a specialized marketplace serving the MRO industry.