Vertical Take-Off. A New Direction for B2B Marketplaces (with abstract)
| Vertical Take-Off. A New Direction for B2B Marketplaces (with abstract) | |
|---|---|
| Published By | Other sources |
| Publish Date | 2023 |
| Authors | Soebhaash Dihal, Pascal Kohlhase |
| Topics | B2B marketplace, Marketplace |
| Statistics | |
| Article Size | words |
| Diagrams | Yes |
| Downloadable Version | Yes |
| Reviewers | |
| Page Owner | Nikolay Sidelnikov |
| Summary Author | Nikolay Sidelnikov |
Abstract
A very well structured document Vertical Take-Off A New Direction for B2B Marketplaces created by PWS explains the basics of vertical B2B marketplaces.
Quote:
The rise of vertical marketplaces in recent years has been remarkable. In fact, the growth of business marketplaces is rapidly outpacing the growth of traditional digital commerce. Vertical marketplaces are an important driver of that growth—but building them takes significant creativity, skills and stamina. Is setting up a vertical marketplace the right move for your company?
The document gives definitions of horizontal and vertical marketplace and explains drivers that makes operators to consider setting up a new vertical marketplace. All these six drivers are explained and a decision maker can check if any of these drivers valid for his particular business. That might be:
- company has an existing B2B eCommerce platform
- a wish to create a one-stop shop
- having unique products or assets
- a wish to improve customer experience
- desire to build strong brand awareness
- opportunity to jump out of crowded horizontal marketplaces
Authors highlight that the decision about building a vertical marketplace must be an integral part of overall digital commerce strategy and the value proposition for buyers and sellers must be in place.
Authors describe different business models to monetize vertical marketplace. Four models are listed:
- a marketplace that book stocks from sellers
- a marketplace which allow sellers to list goods and manage them on sight
- a marketplace which serves as a storefront for the products of sellers
- a hybrid marketplace which blends elements of all the above
It is also highlighted that the decision on whether to own stock or not is a fundamental one for marketplace owners and some pros and cons are suggested.
Five monetization models are explained:
- membership
- services
- transactions
- advertising
- daata
Some typical organizational capabilities are listed that are required to operate such vertical B2B marketplace. Several important questions related to organizational capabilities are explained:
- balance between own capabilities and what sellers bring
- in-source vs outsource capabilities
- location of these capabilities in the organizational structure
- geographical location of these capabilities
- technology stack to use
Finally some attention is devoted to risks and challenges for vertical marketplaces, including the competitive landscape, regulation and taxes and some other.
Full text: Take-Off A New Direction for B2B Marketplaces
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