It may come as a surprise, but many of the sites and applications we use today can be described by one word: marketplaces. Whether it's a taxi ride, a log cabin, or a plumbing service we order or offer online, the platforms we use to do it are all marketplaces.
Most of the marketplaces we know and use every day are aimed at direct consumers, such as Amazon and eBay (B2C marketplaces). Others, like Upwork or Alibaba, target and facilitate the exchange of professional goods or services between businesses (B2B marketplaces). And some are used primarily by large and global organizations, either as sellers or buyers, or both (enterprise marketplaces).
In this guide, we'll unpack enterprise marketplaces. We’ll define what they are, and how they differ from traditional B2С and B2В marketplaces, look at marketplace examples, and share best practices for companies launching an enterprise marketplace platform.
Enterprise marketplaces are a relatively new category in the ecommerce lingo, and if you Google the phrase, there’s a broad range of definitions. Too broad, really.
Some companies define marketplaces as digital powerhouses like Amazon or Alibaba that allow businesses to display their products or services while also inviting third-party sellers.
Others, to the contrary, specifically point out that these are marketplaces operated by organizations that have traditionally functioned in the physical world and are now venturing into the digital platform business model, offering a mix of in-house and third-party products. Examples: Volkswagen’s RIO and Alstom’s StationOne.
Another camp calls them complex B2B marketplaces used by large, global organizations to purchase custom products and services from thousands of suppliers. Examples: Scientist.com and ThomasNet.
And some define enterprise marketplaces as digital channels operated by manufacturers who invite third-party sellers to list their products and interact with buyers.
While there’s no single definition, it’s clear that such ecommerce platforms are:
If we bring all these aspects together, we’ll get the following definition:
Simply put, these platforms are designed to cater to the unique and complex procurement, supply chain, and operational needs of enterprises. But how do those differ from traditional B2B marketplaces?
According to Chris Petersen, the founder and CTO of Scientist.com, enterprise gateway marketplace for drug discovery researchers, enterprise marketplaces have several distinct features:
Features of online enterprise marketplaces
Unlike B2C and B2B marketplaces that follow a similarly standard purchasing process (shop → select → purchase → ship → review → repeat), enterprise marketplaces follow a much more complex workflow common to large organizations.
For example, instead of selecting a single supplier, the buyer first requests price quotes from multiple suppliers through the marketplace. Then the buyer may also require suppliers to go through internal compliance and upload all the necessary documentation to their marketplace account. Once that's done and the order is placed, it can still take several months and multiple invoices to complete the transaction.
In addition, the products or services that enterprises are buying are often highly technical and complex, such as specialized software solutions, heavy industrial equipment, and large infrastructure components, all of which require extensive customization, integration, and support that traditional marketplaces don't have.
Enterprise marketplaces are designed to accommodate the complex structures of large organizations. For example, a global corporation may have regional offices across continents, each with its own sales and marketing teams, while centralized departments like finance and legal oversee global operations from headquarters. Enterprise marketplaces are designed with this complexity in mind. Unlike traditional platforms, they can handle transactions that require complex approval rounds and can be customized based on the specific product or service being purchased.
Unlike B2C and some B2B marketplaces, which can have millions of customers, enterprise marketplaces often have a smaller number of large enterprise customers, all connected to an overlapping global base of many thousands of suppliers. Traditional marketplaces are always looking for the next customer, while enterprise marketplaces spend their time trying to expand within existing customers, seeking wallet share rather than market share.
While this may not be true for every enterprise marketplace, many of them specialize in high-value products and services, such as industrial equipment or R&D supplies. As a result, their average order values (AOVs) are often in the tens of thousands of dollars or higher, depending on the vertical.
Enterprise marketplaces are incredibly sticky. In other words, they are deeply embedded in their enterprise tech stack for faster operations. This includes integrations with internal finance and accounting systems, ERP systems, legal systems, and IT, and can require a lot of resources to get started. That's why moving from one enterprise marketplace to another is quite costly, and not many companies want to risk it.
In summary, the way enterprise marketplaces operate and are designed is closely tied to the nature of their customers (buyers and suppliers). Large, cumbersome, often conservative, slow-to-innovate, and complex organizations can dictate their buying and selling rules by virtue of their size and influence. At the same time, some of these old patterns are being disrupted by the digital transformation that these marketplaces are bringing.
Now, let's take a look at a few enterprise marketplaces from different industries and see how they stack up against the above-mentioned criteria.
Disclaimer: We use public information like company websites, customer testimonials, partnerships, and investor reports to identify enterprise marketplaces. However, since many companies don't disclose specific details about their AOV or customer base, and the presence of well-known logos may not reflect the full scope of engagement, our analysis may involve some interpretation.
Source: Scientist.com
Launched in 2007, Scientist.com is a pharmaceutical marketplace for drug discovery R&D. Its customers include most of the world's leading pharmaceutical and biotech companies, like Sanofi, Novartis, Takeda and AstraZeneca, as well as a network of over 4,000 Contract Research Organizations (CROs). The platform provides access to more than 15 million high-value and complex products, such as reagents and consumables, and thousands of sophisticated scientific research services ranging from toxicology, pharmacology and DMPK to non-human biological sample services.
Although specific AOV figures aren't disclosed publicly, according to some interviews with the company's C-suite, the average Scinetist.com order is worth $30,000, such as a six-month study to test whether their drug is active in an animal model of Parkinson's disease. Since its relaunch in 2015, the marketplace has generated more than $1 billion in cumulative revenue and hasn't lost a single customer.
All these factors indicate that Scientist.com can be called an enterprise-level marketplace. To learn more about the future of the pharmaceutical ecommerce sector and get an overview of pharma ecommerce platforms, read our in-depth article.
Source: Xometry
Xometry (NASDAQ: XMTR) is an on-demand manufacturing service marketplace that connects enterprise buyers with over 10,000 suppliers of custom-manufactured parts and manufacturing services, such as CNC machining, laser cutting, 3D printing, rapid prototyping, and many others, worldwide. At the end of Q1 2024, Xometry had 58,504 active buyers, including nearly 30% of the Fortune 500 from aerospace, consumer products, defense, industrial, automotive, energy and other industries. Some of the major clients include General Electric, NASA, BMW, Dell, Bosch and others.
While the average order value is also not publicly available, according to the Q1 2024 report, the company features "accounts with at least $50,000 spent in the last 12 months," which have seen a notable increase since 2023.
On the technical side, the marketplace integrates with major procurement systems and ERPs, and offers advanced tools such as the Xometry Instant Quoting Engine®, which provides real-time pricing and lead times essential for managing large-scale production.
While it's unlikely that the majority of Xometry's buyers are large enterprises, as in the case of Scientist.com, the industries they serve, their customer profiles, compliance requirements, and integration capabilities clearly indicate the attributes of an enterprise marketplace.
Source: Knowde
Another marketplace that fits the above-mentioned criteria is Knowde. Founded in 2017 by a former ChemPoint (another marketplace) executive, Knowde is an online marketplace for producers and buyers of raw ingredients, polymers, and chemistry. The site supports the non-linear buying processes typical of corporate environments by allowing buyers to search, compare, sample, quote, and purchase more than 200,000 products from more than 8,000 suppliers in one place.
Knowde's buyers include major organizations in agriculture, healthcare, construction, FMCG and automotive, and its suppliers include the world's largest chemical companies, including DuPont, Dow, and Cargill. This all clearly points out to the marketplace's focus on high-value partnerships, consolidated customer bases, and ability to support diverse industries and complex supply chains.
The nature of the products traded on Knowde, such as chemicals, polymers, and specialty ingredients, suggests high AOV relevant to enterprise marketplaces. And given the company's proprietary software solutions for chemical suppliers and distributors, integration with third-party enterprise systems is likely to be available. All in all, an enterprise marketplace indeed.
Since our core expertise lies in building ecommerce platforms with complex enterprise scenarios in mind, here are a few recommendations that we believe make up a successful and future-proof enterprise B2B marketplace.
Many marketplaces, including the ones we just reviewed, are launched to address and respond to pain points in their industries that traditional methods can no longer solve, such as lack of access to or poor quality of in-house services and products, inefficiencies in procurement, and others. The idea of solving these problems with a streamlined, digital, one-stop-shop platform may sound great in theory, but difficult in practice.
Based on an organization's digital maturity, some large companies embrace change faster, while others contend with certain obstacles. Getting everyone on board with a new paradigm can take time, but it is crucial for a successful marketplace launch. To ease the process, engage key stakeholders early to address concerns, provide case studies, and highlight the positive impact on their operations and bottom line.
Lastly, depending on the industry, it's a good idea to provide extensive training and support to buyers during and after the transition. For example, help them select qualified suppliers, as Scientist.com does with its Research Concierge service.
To the marketplace owner, suppliers are as much your customers as your buyers, and in the enterprise space, they can be just as resistant to getting on board. Many of the suppliers you want to see in your marketplace have long-standing, direct relationships with their customers, and they may be skeptical of a marketplace that could change or degrade those relationships.
To prevent this, you need to create a value proposition for suppliers that is as attractive as the one you offer to large customers. A more cost-effective and streamlined sales process, access to new customers, and online tools to help them manage and market their business are all great reasons for a reluctant supplier to flock to your marketplace.
This question is often overlooked in the planning stage, as many marketplace companies get caught up in feature lists, pricing models, and so on. However, this is one of the core questions you need to answer early on if you want your enterprise marketplace to win.
Whether you choose to build your marketplace platform from scratch or opt for a pre-built platform, it's important to ensure that your marketplace platform is flexible and robust enough to scale and adapt as your business grows without extensive redevelopment or downtime. It also needs to be modular and headless, so that you can easily modify and tweak your functionality without affecting other parts of the system.
Finally, the platform needs to be API-driven. In other words, it must support extensive customization and integration with existing ERPs, CRMs, and other systems to meet the specific needs of enterprise buyers and suppliers. And do it fast. Otherwise, you could find yourself in a costly and time-consuming replatforming trap before you know it.
As a technology provider, we understand the value of a future-proof enterprise marketplace software architecture. That's why we created Virto Innovation Platform – a modular, headless, API-first, scalable, cloud-native marketplace management platform designed for complex enterprise scenarios. To learn more about our approach, read our Enterprise eCommerce Architecture Guide.
The answer is probably "yes," as more companies pursue digital transformation to improve their sourcing and distribution models through digital channels. While the line between some B2B and enterprise marketplaces is blurry, as some marketplaces have buyers and suppliers of all types, it's clear that enterprise marketplaces have their place.
For enterprise buyers, marketplaces are a great way to streamline sourcing and inefficient internal operations, get access to a wide selection of suppliers, access more competitive pricing, and ensure that all external work is compliant with internal policies and external regulations.
For suppliers, enterprise marketplaces provide access to a larger pool of potential, large and affluent buyers, create more efficient sales processes, reduce the need for direct marketing efforts, provide opportunities to expand into new markets, and more.
Building an enterprise marketplace can be a complex process that requires careful planning. It can be time-consuming and difficult to build, especially if you don't have significant in-house technical expertise. But with the right marketplace architecture, you will greatly increase your chances of success.
Book a demo with one of our ecommerce experts to learn about Virto Commerce approach to building future-proof enterprise marketplaces and our unique marketplace architecture.
