B2B Wholesale Marketplaces: The Complete Guide 2024

Are B2B wholesale marketplaces the next big thing? If so, why now? The pandemic has forced many of us to rethink the way we do business, and wholesalers are no exception. Since the pandemic, when many processes moved online, marketplaces haven’t lost popularity up until now. Today, digital marketplaces are an integral part of the daily routine of billions of people.

In this article, Virto Commerce experts will walk you through the latest wholesale B2B marketplace trends for wholesalers so you can keep tabs on B2B wholesale market trends as well. We have gathered a lot of experience in B2B marketplaces, so here are our insights on the typical solutions, challenges, and top marketplaces. This article is part of an article cycle devoted to B2B marketplace solutions, B2B ecommerce wholesale marketplace KPIs and metrics. Read on!

1. B2B WHOLESALE MARKETPLACES HISTORY: KEY MILESTONES
2. FACTORS CONTRIBUTING TO THE DEVELOPMENT OF B2B MARKETPLACES
3. HOW B2B MARKETPLACES CHANGE BUSINESS DEVELOPMENT
4. STATISTICS AND TRENDS
5. WHAT IS A WHOLESALE B2B MARKETPLACE?
6. TOP WORLDWIDE B2B WHOLESALE MARKETPLACES
7. NEW B2B WHOLESALE MARKETPLACES
8. TOP CHALLENGES OF B2B ECOMMERCE WHOLESALE MARKETPLACE
9. 6 STEPS TO CREATE A B2B WHOLESALE MARKETPLACE
10. CONCLUSION

When people mention marketplaces, the first thing that comes to our mind is today’s popular online platforms. The pandemic in 2020 gave a significant impetus to the development of marketplaces: people faced lockdowns all around the world, but their demand for purchasing goods had not gone away. However, the history of the gradual transition of trade to online mode began long before the coronavirus pandemic.

The first ecommerce platform, Boston Computer Exchange, was founded in 1982. It was a marketplace for selling people’s used computers and dominated this part of the market in the US in the 1980s. In 1995, influential ecommerce marketplaces emerged — Amazon and eBay.

The companies quickly gained popularity and completed one million transactions by 1997. One more step towards online trade development was the ecommerce payment system PayPal. After its debut in 1998, it gave consumers a trusted avenue to handle both personal and business-related financial transactions.

Another major player among the B2B platforms appeared in 1999. Alibaba originated in China and initially focused on expanding its reach within the country. After venturing into the international B2B wholesale market, the platform became one of the most influential players in the e-commerce industry.

The following 15 years were the era of B2B wholesale marketplaces: Amazon Business, TradeGecko, and others blossomed, changing the world forever.

Today, B2B marketplaces follow the latest trends, and all aim to become the most digitalized and automated platform. People use enhanced technologies like AI and ML to improve solutions, and new, young, and flexible solutions have appeared. One of the essential game-changing details is that all the modern B2B ecommerce marketplaces aim to narrow their target audience as much as possible to create deeply personalized B2B marketplaces for particular industries and even companies.

The development of marketplaces would have been impossible without some factors that helped the industry evolve. Here we go with some of them:

• Spread of the Internet. With access to information and online trading capabilities, companies have more significant opportunities to conduct their business. They can quickly find relevant information about potential partners, study market trends, and analyze competitors. They can also transact online, saving time and resources.
• Globalization. International trade is growing, and more companies are looking to expand their business outside of their home country. B2B marketplaces provide this opportunity, allowing companies from different countries to trade with each other.
• Technology Development. Thanks to the use of modern technologies, companies can optimize their activities, simplify, and speed up sales and purchasing processes. B2B marketplaces offer integrated tools for negotiations, electronic document management, and order management, which allows for reduced transaction time and increased business efficiency.
• Change in Customer Needs. Today, customers expect convenient and profitable ways to make purchases, and B2B marketplaces offer such opportunities. People can easily find the goods and services they need, compare prices and delivery conditions, and look through reviews about competitors. This increases market transparency and helps us make more informed decisions.

Obviously, B2B marketplaces keep changing business processes and expanding the opportunities for sellers and buyers. Here, we have collected such positive changes to demonstrate the solutions can change the world:

• Simplifying the Search for Products. Marketplaces make it easier to find the products needed by bringing together different suppliers in one place. Thanks to this, consumers no longer need to waste time on numerous searches — now everything is available in a few clicks.
• Price Comparison. Since customers can look through a great variety of offers in one place, it is easier to compare prices and choose the best option. It is also easier for companies to study the B2B wholesale market and set a competitive price.
• Saving Time and Money. Thanks to online platforms, all stages of the transaction, from placing an order and payment to delivery, occur quickly and conveniently.
• Access to New Markets. Entrepreneurs can develop their business not only within their country, but also abroad. Sellers can expand their customer base and attract new buyers, which allows them to increase sales and grow their business.
• Increased Efficiency. Online platforms tend to automate many routine operations, which reduces the time it takes to complete them. Thanks to this, companies can focus on more important tasks and increase the productivity of their business.

Many businesses delay creating their own wholesale B2B marketplace because they “don’t need it,” “cannot compete with others,” or “better use third-party marketplaces.” However, the market shows that while there seem to be too many marketplaces, B2B wholesale marketplaces keep trending. Let’s look at some numbers.

According to Straits Research, the global B2B ecommerce market size is expected to reach USD 36,107.63 billion by 2031, which is almost six times bigger than it is now. At the same time, Grandview Research predicts 16% of CAGR for the same period, and more than half of this market is oriented to intermediaries (neither buyers nor suppliers).  This means that the market needs more digital ecommerce systems to ensure greater cooperation between all the intermediaries and market participants.

B2B marketplace sales in the USA experienced a 100% year-over-year growth in 2023, with sales doubling, while e-procurement sales saw a 16% increase from 2022 to 2023.

Among wholesale market participants are manufacturers, retailers, and buyers. According to McKinsey, 65% of them offer ecommerce capabilities.

B2B wholesale marketplaces are convenient for everyone in this chain, and with the evolving trend to digitalize everything possible, it’s a perfect moment for each B2B company to create their own B2B wholesale marketplace for their partners and customers.

Whether brick-and-mortar or digital, a B2B ecommerce wholesale marketplace is a platform where retailers can find products from different wholesale suppliers who add their products to the B2B wholesale market in hopes of finding new customers and increasing sales. The main distinguishing features of such platforms are:

• focus on wholesale sales
• B2B model
• variety of products on one B2B wholesale platform
• functionality for working with products and suppliers (including onboarding and verification of suppliers)

Many customers prefer using online marketplaces because they offer a B2C-like experience: they can buy everything they need in one place without leaving home. On the other hand, business owners gain access to a wide audience, process automation, and quick transactions. Comparing B2B wholesale marketplaces over traditional wholesale channels, we can say that the digital version is at least twice as efficient:

• It offers increased reach and accessibility globally
• It provides efficiency and convenience to all participants of the process
• By cutting out middlemen and reducing the need for physical showrooms or stores, B2B marketplaces can help reduce operational costs
• Collecting tons of data, B2B marketplaces help analyze everything and bring great insight
• Many B2B marketplaces offer integrated payment solutions that simplify the transaction process

This list is not extensive as these solutions are offered much more usually.

While B2B marketplaces mostly sell products, services, and B2B rentals, the product sector is the biggest. To realize which product categories are the most popular today, it makes sense to analyze the biggest platforms like Amazon and Alibaba:

As for Amazon, four years ago, Maintenance, Repair, and Operations were the top categories in the business sector, followed by office and automotive supplies. Today, the most popular categories are electronics, video games, and manufacturing. Nevertheless, before starting your Amazon journey, it is always better to choose one of the supporting analyzing companies like Jungle Scout and analyze the current state of TOP products by yourself.

As for Alibaba, it is better to track the most popular B2C sales and base your B2B hypotheses on it. For example, at the beginning of 2024, the health and lifestyle categories go first to be sold, followed by the evergreen Home and Kitchen category. Many businesses purchase these products to later resell them to the end buyers.

Obviously, there are 5 TOP leaders in the market that changed their positioning from mostly B2C to B2B:

1. Alibaba.com. This is a Chinese B2B wholesale platform with over $300 BN in revenue expected this year. Selling clothes and home supplies as the first product, the B2B online fashion wholesale marketplace continuously grows.
2. Amazon Business: as we discussed, this is the second TOP market player with around $60 BN in revenue and 13% CAGR. Mostly selling various supplies, the USA company tries to overrun Alibaba.
3. TradeGecko. This one is not ex-B2C platform, but the solution originally tailored to help retailers and brands find each other. Not far from Amazon, it’s revenue is expected to be around $5.5.
4. Joor is another successful niche vendor specializing in premium-quality home supplies with $1.5 BN revenue. Joor, an online B2B ecommerce wholesale marketplace who has been connecting fashion brands and retailers for more than 10 years, finally opened up its first China office in downtown Shanghai last month, as the company eyes expansion in the Asian market. To date, Joor has attracted more than 12.5K brands and 325K retailers globally and raised $35 million in funding.
5. Kompass is a French company that helps businesses to find suppliers and buyers globally. The main product category is manufacturing supplies.

Besides these TOP market leaders, there are much more great examples of B2B wholesale marketplaces:

Turner Price in the UK has recently launched the U.K.’s first food service marketplace, with great ambitions. Since its launch in May 2021, its product range has risen from 4.5K to 12K SKUs and is expected to climb further, reaching 50K SKUs by April next year. Turner Price takes a relatively small commission on sales made by suppliers through their platform, but the marketplace plans to introduce other charges (for having a store on the marketplace, for example) as the model matures.

In France, Ankorstore, which had been building a B2B wholesale marketplace for independent shop owners, raised a swapping $102 million Series B funding round in May 2021. As of now, Ankorstore is live in 14 different markets and is already working with 5K brands and 50K shops. According to Ankorstore’s representatives, the potential market is huge as the company has identified at least 800K independent shops across Europe that might be interested in joining Ankorstore.

Abound, which initially started as a community connecting manufacturers’ representatives with retailers, now operates around a business model similar to Ankorstore. Earlier this year in February, Abound raised $22.9 million in its first institutional round of funding. On Abound’s platform, retailers can now source different products with wholesale prices, free returns and even Net 60 sale terms. According to Abound’s reps, since the start of the pandemic, the marketplace has added more than 180K new products, and its monthly sales have increased 20-fold.

In October 2020, Faire, a San Francisco-based startup turned online wholesaler, completed a $170 million Series E round led by Sequoia Capital, thus doubling its valuation to $2.5 billion.

Earlier this year, in March 2021, Faire’s representatives announced its further expansion by bringing its brand network to independent retailers across the U.K., adding that the company has plans to launch its marketplace across other countries in Europe in the coming months.

These are only a few examples of the platforms that opened after-pandemic, the number of such companies continuously grows.

There are quite a few reasons why wholesale has been slow to adapt to ecommerce: The industry is difficult to digitize because of its notoriously complex arrangements in pricing and fulfillment. Payments usually arrive in installments with an attached credit line; pricing and delivery are often the result of lengthy negotiations. More often than not, the contractual arrangements are privately discussed and not shared publicly, meaning that conditions are tailored to each individual customer. Moreover, the logistics take much longer. Instead of days, months can pass before the ordered wholesale goods are delivered to the customer.

Below, we’ve summarized the major quirks that make B2B wholesale unique and, consequently, make it more difficult to digitize:

• Contract-based pricing: Sometimes there’s little consistency and transparency in B2B ecommerce pricing because prices are subject to multiple-stage negotiations, which result in contractual agreements with bespoke prices. Suppliers often benefit from this type of arrangement because it gives them more leeway for price discrimination.
• Financing: B2B transactions often come with payment terms, such as net 30/60, meaning suppliers allow customers a line of credit that can be paid within a stipulated timeframe after delivery of goods and services. There are multiple other ways to settle invoices, including dynamic discounting and supply-chain financing.
• RFQ: Quote management is an integral part of the B2B shopping experience because buyers expect custom and volume discounts on bulk orders, which can further complicate the buying journey.
• Payment: Although digital solutions are catching up quickly, nearly half of all payments are still paper checks. Other payment methods include electronic wires, ACH and credit/debit cards.
• Insurance: B2B purchases typically come with insurance, which serves to protect against damage to goods in transit.
• Shipping/fulfillment: Deliveries are also often premeditated and can take weeks or even months in some cases.
• Compliance: Some sensitive goods (medical equipment or pharmaceuticals) come with a compliance burden, which further complicates many B2B processes, such as storage, shipment, and fulfillment.
• Customer experience: one of the most valuable measurements of business success among the marketplaces is the support of users. In the omnichannel world of evergreen expectation, it becomes challenging to track all customer needs and satisfy them. Luckily, with the right B2B wholesale platform at hand, we can change this positively.
• The Procurement Process is another challenge related to the need to account for all the products in warehouses and control them digitally. For this reason, procurement marketplaces also become popular.
• Vendor Onboarding is not an obvious challenge, but most vendors still do not want to join marketplaces and require B2C-like experience, so the companies have to take action to provide the best experience.

When wholesalers reach adequate maturity, they are often confounded by a dilemma of how to further expand their reach and product assortment to increase market share and revenue. There are several ways to achieve those goals, such as building up a range online, extending the choice of existing suppliers, or shifting to a marketplace model like Amazon's by connecting multiple sellers on their B2B wholesale platform.

Below are a few suggestions on how to switch to a digital B2B wholesale marketplace model, which might help you in your transitioning journey.

As we have observed, wholesalers typically choose between two common business models. In the first business model, a company creates a B2B wholesale marketplace solution by buying out goods from suppliers and holding on to them until there’s an opportunity to sell; thus, it assumes all the risks related to procurement, storage and fulfillment, and profits from the resale margins. In the second scenario, which we deem as the most sensible, companies don’t buy out goods but provide the B2B ecommerce platform and infrastructure for suppliers so they can sell to customers directly.

Unless your company is digitally native or sufficiently backed financially (so it can incur unforeseen losses without damage), we believe that the marketplace model is only sustainable when the business is digitally mature and has a reliable (flexible, extensible and composable) B2B ecommerce platform.

Provided you satisfy the above criteria, the next thing to consider is your relationship with suppliers, including:

• Permissions and controls to delegate
• Financial arrangements between parties
• Access to customer data
• Control over the logistics process

Because of the substantially heavy price tag in B2B, finding reliable suppliers is critical. Therefore, apart from sourcing suppliers, you need to consider steps to verify them as trustworthy. The supplier verification procedure will probably turn out to be a multi-stage process where you may assign different statuses (and grant certain permissions) to suppliers’ profiles to reflect their accountability.

Ensure the vendor offers natively created B2B marketplace for wholesale capabilities: such popular platforms like Virto Commerce, Mirakl and Spryker are good options. See the full list in our article on the topic.

The prevalent revenue model of B2C—that is, the GMV (gross merchandise value) rake (the percentage of GMV collected by marketplaces)—doesn’t translate well to B2B realities, forcing B2B online marketplaces to come up with creative ways to monetize their business.

Among other common B2B online marketplace revenue models are:

• Subscription with either service- or membership-based regular fees for different levels of access to the marketplace
• Advertising packages that include different types of placements in the marketplace
• Complimentary services, features and functionality
• Fulfillment services with warehousing and shipment handling
• Financial services, such as insurance or credit

By continuously testing, innovating and introducing new adjacent services, businesses can secure a market share, ensure customer and supplier loyalty, and safeguard stable cash flow for years to come.

Determining an online marketplace architecture involves thinking through the comprehensive set of features that will ensure the exact shopping experience you want to create for your customers and partners. Since wholesale trading is more nuanced than retail, it requires specific business functionality (such as bulk ordering and tiered quantity discounts) to ensure a smoother customer experience and, as a result, greater customer satisfaction and loyalty.

Here is what you’ll need to kick start your B2B wholesale marketplace venture:

Catalog management with a relevant publishing mechanism in case you decide to allow your suppliers to upload and manage their own catalogs.

To ensure compliance and consistency, you may ask suppliers to upload products on a vendor portal first, where they can be further checked automatically or reviewed manually before becoming available to customers.

Powerful search functionality with full-text and cross-cluster search, advanced filtering, relevance scoring, auto-complete, and other handy features that will help customers find products quickly.

Allowing customers to search for products by importing files or entering SKUs will further help them on their buying journeys.

Pricing and organization of tripartite billing including prices shown to customers and any additional charges for suppliers.

Since the payment management will heavily depend on the chosen monetization model, your B2B ecommerce platform needs to have a robust and flexible pricing mechanism that’s able to accommodate different business scenarios and change in accordance with the (new) pricing policies if need be. 

Your B2B platforms also needs to be able to integrate with different payment processing systems to accommodate different payment methods and post-delivery payment processing.

Order management and reporting.

Since the processing of orders also depends on the chosen business model, the process will vary from one organization to the other. However, what’s crucial is to ensure that both your customers and partners can track information about any active, pending or canceled orders.

Your suppliers will surely appreciate access to advanced order details and analytics (such as real-time order reports) because such reporting gives an opportunity to analyze critical sales metrics and improve performance. This ultimately leads to an increase in sales and higher margins (fees or rakes) for you.

Quotation management including the creation, submission and processing of quotes and invoices.

Since bulk discounts and RFQs are common wholesale, it will be a shame if your B2B ecommerce platform doesn’t have RFQ functionality or is not integrated with the likes of QMS (Quotation Management Systems).

QMS typically pulls data from various sources and accounts for different criteria, such as inventory levels and customer-specific discounts, and other pricing arrangements, before arriving at a proposed quotation. QMS, through automating the bargaining process, significantly improves your chances of closing a sale and simplifies the work of your sales personnel.

Personalization (including content contextualization, personalized prices, recommendations, etc.).

Because of the differences in buyers’ shopping behavior in B2B and B2C, personalization in B2B serves a different purpose. Instead of trying to upsell quickly, the goal is to help customers complete orders as efficiently and error-free as possible. Anything that hinders the customer’s shopping journey like irrelevant recommendations will only put them off over time. On the contrary, suggesting complementary parts or accessories, and substitute products in case the original is not available will increase customer satisfaction. Such suggestions help customers assemble orders and do their jobs more efficiently.

Account and user management, approval workflows, and different access levels/permissions.

Unlike B2C, where an account typically belongs to an individual, in B2B, an account belongs to an organization. A B2B account structure is usually very complex and implies different types of users with varying levels of access and permissions. Your B2B ecommerce platform needs to allow administrators behind customer accounts to configure approval rules and workflows that suit their organizations.

We cannot overemphasize the importance of necessary integrations of a B2B ecommerce platform with different third-party systems (ERP, CRM, CMS, etc), which are absolutely crucial for the stability and consistency of data across different channels. Real-time inventory is one of the most important factors for conversion growth, so integration with the inventory management systems should be your top priority.

With other things changing quickly, privacy and data protection remain unchanging concerns. You should pay the highest attention to data privacy compliance and process your customers’ data in accordance with the regulation relevant to your and their jurisdictions. Handling all data with consciousness and care and allowing your customers to opt-out, while respecting their decision to do so, should become your standard practice.

As online marketplaces gradually take over the world, more companies face the same dilemma—to move digitally and develop customer-centric platforms or watch as other companies overtake them. The market is not without its pessimists, of course. Some experts believe that the bust is only natural and inevitable after the boom, but most remain positive. After all, online marketplaces have been a long time coming.

If you need a strong B2B marketplace for wholesale, choose the platform that offers the needed capabilities out of the box or is ready to deploy any innovation needed, like Virto Commerce. Reach out to our teams to learn more about Virto capabilities and building your own B2B marketplace.