B2B, which is short for Business 2 Business, involves business deals between two companies. All major and minor deals between two companies are included in B2B. It can be something as simple as a company supplying products to another company for their own use, or a major sharing deal between two big companies. And to conduct deals, there are two type of B2B sales platforms available: direct and marketplaces.
Direct Sales Platforms
Direct sales platforms are owned by the business that host it, and typically deals with products and services of all the brands that come under that business. For example, if Disney starts a direct sales B2B platform, they will offer all the brands owned by them in it, such as Star Wars, Marvel, Beats etc. If anyone has to make a B2B deal with Disney, they will have to use such a platform.
Marketplaces are websites that are owned by a holding company that only acts a 3rd party between the selling company and buying company. For example, Alibaba is one of the largest B2B sales platform in the world where millions of companies offer their products. In a B2B marketplace such as Alibaba, a business or a company uses the platform to choose from many different unrelated brands to buy products or services in bulk. Unlike marketplaces like Amazon and eBay, B2B platforms typically are for business-to-business sales.
Major Differences Between Direct Sales Platforms and Marketplaces
Both of these have their own set of advantages and disadvantages, and they typically cater to very specific type of business.
Direct sale platforms are usually used by well-known businesses who have a well-known brand image. If a business wants to do a deal with a specific brand, then direct sales platforms are beneficial. The client has to know the business and brand in order to do business with them, and this is what direct sales platforms cater to. If a brand or business isn’t well-known, they may have a hard time attracting clients to their direct sales platforms. When talking about marketplaces, the major thing businesses look for is the exposure. Unlike direct platforms where exposure is only when a client knows about the brand, marketplaces are visited by lot of prospective clients, hence it is perfect for small to medium business with limited to no brand exposure. Big marketplaces allow them to sell their products without much issues, and most clients using B2B marketplaces don’t look at brands, but only at pricing. This gives rise to competitive pricing, where every business tried to outdo their competitors by offering their wares at low prices. This means fierce competition in marketplaces among competing businesses, an issue that is non-existent in direct sales platforms.