B2B Wholesale Considers The Alternative To The Mega-Marketplace

With B2B commerce rapidly migrating online, major marketplaces like Amazon have lowered the barriers for both business buyers and suppliers to embrace digital strategies.

This market evolution, in some ways, has democratized eCommerce. Even the smallest of vendors can now reach a global customer community with the help of a big marketplace brand. This tactic negates the need for small suppliers, which often work with thin margins and few resources, to build proprietary online sales portals.

But there are drawbacks to this strategy, according to Danny Alex, CEO of Bravada.

As a media company, Bravada operates multiple B2B and B2C commerce sites across a variety of product categories. It’s a model that other wholesalers and B2B vendors may wish to replicate. In a recent conversation with PYMNTS, Alex discussed why B2B wholesalers should consider giving eMarketplaces the cold shoulder and embrace the benefits of operating one’s own online platform, despite the extra effort.

B2B Sales In A New Era Of Commerce

Retail has been going through an identity-revision revolution over the last decade, and B2B commerce has begun to ride the coattails of innovation. Enabling smaller suppliers to adopt the eCommerce model, however, is no easy task.

“After 2012 was the decimation of retail and the complete reorganization of consumer habits,” Alex said. “It’s a realignment of everything that we thought we knew in terms of retail.”

Wholesale is a massive opportunity, he added, emphasizing the importance of following the mantra, “Best product, best price, best service.”

Achieving those goals may not always be possible in the marketplace model. Though platforms like Amazon Business can unlock a wider customer base, Alex noted that working with big names in the eCommerce industry doesn’t come without its drawbacks.

Vendors must follow strict rules and can be barred from selling on these platforms. At the same time, suppliers give up a significant stake in their own operations: marketplace operators control the flow of capital, causing some suppliers to have to wait for payment, while they also retain ownership of the customer relationship. According to Alex, suppliers that use these portals are merely “borrowing traffic” when they fulfill orders.

And while proprietary sales platforms may mean a smaller customer pool, that’s not necessarily a bad thing.

“You don’t have these massive brands in the wholesale side,” he said. “You can facilitate a great business and a growing business by getting to the smaller retailers.”

An Educated Approach

Building up a customer base and promoting loyalty by retaining ownership of the customer experience can be a solid way for small B2B suppliers to launch successful digital wholesale strategies.

But launching one’s own website that can offer best of breed services to buyers is no easy task. As an expert in website development, Alex pointed to the importance of SEO (search engine optimization) to reach a buyer base.

“If you’re only getting traffic by advertising, you’re going to, chances are you’re not going to make money,” he said.

At the same time, suppliers need to secure control of the entire supply chain, which includes maintaining contacts on the production side and keeping abreast of industry innovation to keep product availability and choice competitive.

That’s no easy feat, especially for smaller B2B suppliers. As the retail and commerce ecosystem continues its dramatic evolution, these vendors will often be faced with a choice: embracing the marketplace model or going it alone. There are pros and cons to each strategy, but as Alex noted, proprietary eCommerce sites can deliver massive benefits — if a supplier (or its partners) has both the industry and technological know-how for success.

“Once you own that traffic, no one can knock you down,” Alex said “You are the captain of your own success.”